It has come to light that only a small fraction of French cryptocurrency holders have declared their coins to the state, with just 150,000 residents correctly declaring their cryptoassets at the end of the past financial year. This revelation has prompted the Ministry of Public Action and Accounts, along with the nation’s tax bodies, to take action.
Clubic, a French IT magazine, reported that tax officials suspect many taxpayers are under-declaring their assets. In response, the government is preparing to roll out new legislation in collaboration with the Economy Ministry. This legislation will include a large arsenal of measures that aim to force crypto holders to comply with the government’s regulations.
The impending legislation, bundled with other anti-fraud rules, is expected to serve as a rude awakening for French cryptocurrency enthusiasts. Failure to declare crypto holdings on tax returns can result in fines amounting to 40% of the coins’ total worth. For professional crypto traders, the penalty can be doubled to a significant 80%.
The new proposals, set to be discussed by lawmakers and senators in the coming weeks, could see the light of day before the end of fall 2024 if they face no opposition in parliament. This would mean that the regulations could be enforced before the close of the fiscal year 2024. The Ministry of Public Accounts also aims to grant the tax body increased powers over citizens’ overseas assets to clamp down on those attempting to conceal their tokens in foreign-based wallets and crypto exchanges.
An alarming report by a major French media outlet revealed that despite the low rate of declaration, approximately 5 million French individuals hold cryptoassets, including Bitcoin. Furthermore, in March, it was disclosed that 15% of individuals aged 18-24 have invested in cryptocurrency, while 9% of all French citizens have dabbled in crypto at some point in their lives.
The French government is taking decisive steps to ensure compliance among cryptocurrency holders and cracking down on tax evasion in this sector. With stricter regulations on the horizon, French crypto enthusiasts must brace themselves for the significant changes that lie ahead. It is imperative for all individuals involved in cryptocurrency trading to understand and abide by the forthcoming legislative measures to avoid hefty penalties and legal repercussions.