Crypto-to-crypto transactions will not be liable to tax in France, according to the country’s Finance Minister.
Minister Bruno Le Maire said that the French authorities would not consider crypto transactions as taxable until they are converted into fiat currencies. Quoted in Bloomberg Tax, Le Maire said the government viewed the conversion as the appropriate point at which to apply tax.
We believe that the moment the gains are converted into traditional money is the right time to assess tax.
In reference to value-added tax (VAT), Le Maire said this is only applicable when cryptocurrencies are used to buy assets or services, in a move ostensibly designed to reduce the difficulties of tracking crypto-to-crypto transactions for tax purposes.
According to the reports, the new model is already in operation, with the comments likely to be of interest to French crypto speculators and merchants.
The comments help clarify how the French tax authorities view cryptocurrency transactions. By shifting the tax basis to the point of conversion, Le Maire has effectively exempted a large number of cryptocurrency transactions from tax liability.
The news comes on the same day Le Maire was quoted as saying Facebook’s Libra stablecoin could not be permitted within the EU in its current guise, citing concerns over the negative effects of the “privatisation of money” alongside risks of fraud and market abuse.
The move follows similar steps by tax authorities in Portugal, who set out their own clarified policy position at the end of August.
Like France, the Portuguese authorities have elected to exempt crypto transactions from tax, with Portugal going further in exempting all cryptocurrency activities from tax altogether.
In the United States, a new bill presented before the House of Representatives would allow gains and losses from like-for-like crypto transactions to be considered for tax purposes.
It comes as regulators and tax authorities worldwide consider how best to respond to the challenges of cryptocurrency speculation, at a time of increasing mainstream interest in digital currency markets.
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