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Economy

Cryptocurrencies and Tax Obligations in 2024: What You Need to Know to Properly Declare Your Gains

Wednesday 17 April 2024 - 11:50

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Bitcoin reached new highs in March 2024, surpassing $72,000. While this performance is excellent news for cryptocurrency investors, it also raises questions about the tax obligations associated with these digital assets. With the recent evolution of legislation governing the management of crypto-assets, it's essential for French taxpayers holding cryptocurrencies to understand how to properly declare their gains and the risks involved in non-compliance.

Declaration and Taxation of Cryptocurrency Gains

For French taxpayers, any capital gain realized from cryptocurrencies exceeding €305 in a year must be declared. These gains are taxed at a flat rate of 30%, comprising 17.2% in social levies and 12.8% in income tax. However, a new option now allows applying the progressive income tax scale, which may be more advantageous for some investors depending on their income bracket.

Furthermore, digital assets held with foreign entities must be declared using form no. 3916bis. Neglecting this declaration can result in fines of up to €750 per undeclared account.

Beware of Errors and Fraud

It is crucial to be meticulous in calculating capital gains. Any errors can result in penalties of 10%. In cases of proven fraud, the surcharge can reach 80%.

To ensure compliance, taxpayers are encouraged to consult the dedicated page on the Economy and Finance Documentation Center regarding digital assets.

In conclusion, cryptocurrency investors must declare their gains and foreign holdings to avoid penalties. Increased vigilance is required due to the constantly evolving tax regulations in this rapidly expanding sector.