everything you need to know about the 2024 tax return

Each year, taxpayers must submit their duly completed income tax return during May-June (the exact date varies depending on the department). And happy owners of Bitcoin, Ethereum, Ripple, Dash and other cryptocurrencies must mention the gains made on their declaration.

What is the taxation in force in 2024 for virtual currencies? How to declare your crypto earnings to the tax authorities? All our explanations for completing your 2024 tax return for 2023 income when you own cryptocurrencies.

Are cryptos taxable?

The taxation of virtual currencies evolves regularly, at the same time as investment in crypto assets becomes more widespread.

But gains made in crypto have been taxable since 2014 and continue to be. It is mandatory to declare taxable transactions in cryptocurrencies to the tax authorities annually and to draw up a list of capital gains and losses. Note, however, that only cryptocurrency/fiat currency transactions are taxable. Cryptocurrency/cryptocurrency transactions are not taxed. You will also be taxed if you purchase a good or service in cryptocurrencies.

The taxation of gains made in cryptos depends on the status of the investor. Taxation is not the same depending on whether you are a non-professional investor or a professional investor.

What taxation for my cryptos if I am a non-professional investor?

Before January 1, 2019, virtual currencies were subject to the same taxation as movable property, which involved declaring each transfer, the capital gain of which was taxed at 36.2%. Since this date, cryptocurrencies have been taxable as “digital assets”, a new category born from the State’s desire to provide a regulatory framework for crypto assets.

Since the 2019 finance law, the tax treatment of transfers of crypto assets carried out has been regulated. Since that year, the French have had the obligation to calculate and declare their taxable gains in cryptocurrencies at the same time as their income tax return. In fact, the taxpayer is taxed on the capital gains generated by his occasional purchase and resale of digital assets.

The new regime provided for by article 150 VH bis CGI subjects the overall capital gain on digital assets to a flat tax of 30% (flat tax). The taxation of this new type of assets is therefore similar to capital gains since it is the single flat tax that applies (12.8% tax and 17.2% social security contributions). In the event of a global capital loss, the latter is neither deductible from other income nor carried forward to the following year.

Please note: there is a transfer allowance of 305 euros per year for non-professional investors. Thus, if the total amount of sales did not exceed 305 euros, it is not even necessary to indicate the amount of the capital gain.

Since January 1, 2023, investors can choose between the PFU (single flat-rate levy) at 30% or the application of the progressive scale of income tax (IR) on capital gains generated by their crypto activities. currencies. Thus, investors not paying tax will be taxed at only 17.2% (amount of social security contributions) and those in the 11% tax bracket will be taxed at only 28.2% (11% of tax + 17.2% social security contributions).

Also note that the CSG paid (9.2%) will be deductible from taxable income at 6.8%, while that included in the PFU is not.

Professional investor in cryptocurrencies or private investor in cryptocurrencies: which regime applies?

Previously, it was particularly difficult to know whether the tax authorities considered you a professional investor or not.

The situation has been much clearer since January 1, 2023, when the rules of the game evolved and became clearer. Investors selling cryptocurrencies as part of the management of their private wealth are therefore now considered non-professional sellers, regardless of whether they make sales occasionally or habitually or whether they manage a large volume of transactions.

If you are wondering, it is a safe bet that you are considered an individual investor and not a professional investor. Indeed, according to the administration, the qualification of professional must remain the exception and the frequent use of the IT tool to carry out exchanges, just like the fact that the income from the trading activity is higher than the professional income are not sufficient criteria on their own to reclassify a taxpayer as a professional.

What taxation for cryptocurrency mining activity?

If you engage in cryptocurrency mining activity, the gains related to this activity are also taxable. Mining falls under the non-commercial profits (BNC) regime. When selling cryptocurrencies, it is of course the tax on capital gains on digital assets that will apply.

What is the imposition for Staking cryptocurrencies?

Remember that staking corresponds to the immobilization of cryptocurrencies as part of the proper functioning of a proof of Stake blockchain. Locking tokens obviously gives rise to remuneration. As with mining, staking income should therefore come from non-commercial profits for the year of collection and capital gains on digital assets for the year of sale. However, some believe that the rewards are acquired free of charge and are simply added to portfolios, meaning that they are only taxed at 30% when sold for value. But this point is debated and the legislator would do well to clarify the taxation of gains linked to staking.

What is the tax for lending cryptocurrencies?

Lending which, as its name indicates a loan, corresponds to a loan of digital assets to a platform or protocol, in order to provide it with liquidity against interest. Logically, these gains therefore fall under the taxation of debt income for the year of collection (PFU at 30%) and the regime for capital gains on digital assets for the year of sale. However, some believe that they should be considered as acquired free of charge for the application of the capital gains regime on digital assets upon their sale. Here again, the question remains unanswered.

What taxation for NFTs?

When it comes to NFTs, the taxation is not very clear. We can indeed consider them:

• as a digital asset (PFU at 30% or IR+PS scale if you are a non-professional investor);
• as a work of art (6.5% of the amount of the transfer or 36.2% of the amount of the capital gain);
• or as movable property (capital gain taxed at 36.2% with a reduction of 5% per year of ownership after 2 years and transfers less than or equal to €5,000 exempt).

When in doubt, the qualification as a digital asset is probably the one to remember. However, in the event of significant gains, it is better to contact a tax lawyer who can carry out a personalized analysis of your situation.

When to pay your crypto taxes in 2024?

Every year, you will need to attach your Cerfa 2086 form to your income tax return to pay taxes related to your crypto gains.

Please note: the opening of the income tax declaration begins on April 13, 2024. The declaration deadline varies depending on the department of residence.