How to Report Bitcoin Gains in France: Your Complete Tax Guide

Understanding Bitcoin Taxation in France

Reporting cryptocurrency gains is mandatory for French residents under Article 150 VH bis of the Tax Code. Whether you’ve sold Bitcoin for euros, traded it for other cryptocurrencies, or used it to purchase goods, these transactions trigger tax obligations. France distinguishes between occasional investors and professional traders, with different tax treatments for each. Failure to properly declare gains can result in penalties of up to 80% of owed taxes, making compliance essential.

What Constitutes a Taxable Bitcoin Event

You must report these cryptocurrency transactions in France:

• Selling Bitcoin for fiat currency (euros/dollars)
• Trading Bitcoin for other cryptocurrencies (e.g., BTC to ETH)
• Using Bitcoin to purchase goods or services
• Receiving Bitcoin as payment for freelance work

Non-taxable events include: Buying Bitcoin with fiat, holding Bitcoin without selling, and transferring between your own wallets. The critical factor is the euro value at transaction time, which you must document using exchange rates from platforms like CoinMarketCap.

Step-by-Step Reporting Process

Step 1: Calculate Your Gains
Use this formula for each transaction: Sale Price – Purchase Price – Transaction Fees = Taxable Gain. Maintain records including dates, amounts, and EUR values.

Step 2: Determine Your Trader Status
France categorizes taxpayers as:

• Occasional Investors: Occasional trading activity (taxed under capital gains regime)
• Professional Traders: Regular trading with sophisticated tools (taxed as business income)

Step 3: Complete Tax Forms
File before the annual May-June deadline:

• Form 2042 (Standard income tax return)
• Form 2086 for capital gains (occasional investors)
• Form 2035 for professional trading income

Step 4: Pay Applicable Taxes
Occasional investors pay 30% flat tax (12.8% income tax + 17.2% social charges). Professional traders pay progressive income tax (up to 45%) plus 17.2% social charges.

Special Considerations and Deductions

France uses FIFO (First-In-First-Out) accounting for crypto. Deductions include:

• Transaction fees (exchange/platform costs)
• Hardware expenses for mining (professional traders only)
• Previous capital losses offsetting gains

Note: Gains under €305/year are tax-exempt for occasional investors. Long-term holdings no longer qualify for reduced rates since the 2019 PACTE Law.

Frequently Asked Questions

• Q: How are crypto-to-crypto trades taxed?
  A: Each trade is a taxable event. Calculate gain/loss based on EUR value at transaction time.
• Q: What if I lost money on Bitcoin trades?
  A: Losses can be carried forward 10 years to offset future capital gains.
• Q: Do I report foreign exchange transactions?
  A: Yes, all transactions involving French tax residency must be declared regardless of platform location.
• Q: How long should I keep records?
  A: Maintain transaction history for 6 years after the tax filing date.
• Q: Are airdrops and forks taxable?
  A: Yes, they’re considered taxable income at market value upon receipt.

Penalties and Compliance Tips

Late declarations incur penalties:

• 10% automatic penalty for missed deadline
• 40% for unreported income discovered by authorities
• 80% for fraudulent declarations

Pro Tip: Use crypto tax software like Koinly or Accointing to automate calculations. Consult a French tax advisor specializing in cryptocurrency for complex portfolios. Always convert transactions to euros using verifiable exchange rates to ensure audit-proof documentation.