France has decreased the tax rate on cryptocurrency transactions, reducing it from 45% to a flat rate of 19% after a reclassification action made by the Council of State.
France’s highest supervisor on legal administration matters, The Conseil d’Etat (Council of State) announced on Thursday that sales of bitcoin would no longer be categorized under commercial or non-commercial activity. It is now classified as transferable property and capital gains taxes will be applied accordingly.
The move to cut the tax rate supposedly came after citizens called on to the Council to re-evaluate the rules concerning cryptocurrency trades which have been established since 2014.
Nevertheless, there are some exceptions to this new lower rate. Crypto mining will be taxed as non-commercial profit and professional crypto-trading proceeds will be taxed as industrial and commercial profits. But in spite of these exclusions, this news will please many enthusiasts from the French cryptocurrency community.
France was at first conservative when it came to dealing with cryptocurrencies but has nonetheless made signs of progress this year. In January the government commissioned a group led by the former deputy-governor of the Bank of France, Jean-Pierre Landau, to develop national cryptocurrency regulations in order to decrease risks produced by speculation.
Its work has though been wary. At first, they proposed a ban on 15 cryptocurrency trading platforms within France. Though, the government had an unexpected change of heart on this when it issued an additional initiative to encourage ICO growth in France in March, by giving legal recognition to this practice.
“Our goal is to provide legal certainty for those who seek it, without hindering those who want to follow their own path. We have a rather liberal approach. We work for a flexible, non-dissuasive framework. At the same time, we are not naive either, we know that these products can be risky,” said an authority at the Ministry of Finance.