Essentiality of the Perfection in Crypto World

This is a regular question among experts of cryptocurrency (or “tokens” for the ether) how to declare his income when selling ether, bitcoin or other cryptocurrency against euros? And what about inheritance rights?

Of course, the answer depends primarily on your place of tax residence. If you declare and pay your taxes in France, this article gives an update on the applicable regime. This article does not constitute tax advice.

The tax regime for bitcoin and other cryptocurrencies has been clarified by a series of tax administration publications relating to:

  • occasional income from cryptocurrencies,
  • revenue derived from cryptocurrencies as usual,
  • taxation and
  • gift or inheritance rights.

ISF and the rights of donation and succession

The rule is clear: cryptocurrencies are taxable. For example, if you die and leave a wealth of 10,000 dollars to your children, the amount is taxable to inheritance tax in full (for the equivalent value in euros on the day of death). And you have to declare each year to the ISF the value on January 1st of ETH that you have if you exceed the tax threshold (14,83,823.90 dollars in 2016). Explore about it more in now.

Revenue from cryptocurrencies

In general, any income is taxable. In practice, the rule is a little more complicated: in order to determine the tax system, it is necessary to distinguish whether the income constitutes income from regular activity or not, ie “as usual”. We must take into account the efforts made, but also the income generated, the number of operations.

On this point, the tax administration specifies this (it should be noted that the administration speaks only bitcoin but this applies naturally to all cryptocurrencies):

With regard to the NBCs (non-commercial profits, activity occasional) – BOI-BNC-CHAMP-10-10-20-40-20160203, n ° 1080:

Bitcoin happens to be a fundamental account unit accumulated on an electronic medium that happen to allow a community of users for exchangingservices and goods amongst themselves without resorting to legal currency.

Bitcoins are acquired either free of charge in return for participating in the operation of the system, or for a fee on internet platforms created to allow the purchase and sale of bitcoins against legal tender money.

The issue of the number of bitcoins is limited and determined, their acquisition for resale proceeds from a speculative intention. The income from this activity, when it is used on an occasional basis, is income falling under the forecasts of article 92 of the CGI. It is specified that the gains are taxable, regardless of the nature of the goods or securities against which bitcoins are exchanged (exchange of bitcoins for dollars, but also purchases of goods of any kind settled by bitcoins: in this case, the gain must be determined by reference to the euro value of the property acquired).

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