In a major boost to Bitcoin and other cryptocurrencies, the French government on Thursday announced its tax reform plan that would see a significant reduction of tax rates for retail cryptocurrency traders. The government has reduced the capital gains tax on profits coming from cryptocurrency investments from 45 percent to 19 percent.
The aggresive tax reforms on cryptocurrencies announced by the French Council of State will help the sector in the long run and also meets the demand of crypto trader for lowering the tax rates. After adding the contributions to social welfare systems (which goes up to 35 percent) which is mandatory for every type of income, the total tax demand would still below the 40 percent threshold, according to the report from French news outlet Le Monde.
The effects of tax cuts come after France classified Bitcoin and other cryptocurrencies into the “moveable property” category which is subjected to a flat 19 percent tax rate on capital gains. Earlier, cryptocurrency gains were considered as “industrial and commercial profits” while few or occasional transactions were constituted as “non-commercial profits.”
France has been aggressively working on cryptocurrency regulations and has also created a crypto task force to examine the provisions of the regulation. In 2017, Robert Ophèle, chief of French stock market regulator AMF has supported the emergence of digital currencies as it could serve a legitimate business purpose. In March, its market regulator also reported that it is looking at a resolution that would encourage the development of initial coin offerings (ICO).
