To your calculators, or rather your Excel tables! – As planned, we will return to the topic of capital gains from selling digital assets, so you can complete tax return for 2021.
Calculate your capital gains automatically thanks to Currency trading and its algorithmic trading solution Finally within the reach of individuals.
Tax-deductible transactions of digital assets
First, it should be borne in mind that not all transactions in digital assets are considered taxable events. So Non-taxable transactions the following :
- Buying Cryptocurrencies by Legal Bidding (Fiat)
- Exchange cryptocurrency against other cryptocurrencies
- Cryptocurrency exchanges for stablecoins
On the other hand, the Sell cryptocurrency for fiat currency as such Buying goods or services In cryptocurrencies, they are transfers of digital assets Taxable.
One of the modifications I suggested stone person To the Finance Act of 2022 consists of establishing Exemption for purchases of goods or services of less than 3,000 euros. Unfortunately, the National Assembly rejected this amendment during the first reading…
Calculating capital gains to dispose of taxable digital assets
Trading operations are carried out on a regular or episodic basis
provisions Article 150 VH bis of the General Tax Code (CGI) applicable to the disposal of taxable digital assets calls for a distinction as to whether such operations are considered to be carried out. professionally where not professional. However, the provisions of the Article do not specify the criteria for determining whether the activity is carried out on a professional basis or not.
However, the difference is huge since Transactions that are made on a regular basis are considered Taxes will be charged in accordance with the provisions applicable to Industrial and Commercial Profits (BIC), as this activity will be considered commercial. On the other hand, those who consider It is made on an occasional basis They are taxed according to the realized capital gains to which the tax applies. flat tax rate 30%.
However, the Discrimination criteria are not clear, then the boundary between the usual norm is sometimes weak. The principle of taxation calls for taking into account several clues such as:
- used tools for the benefit of commercial activity;
- level Rationalization and evolution of activity
- Transaction frequency And Contract period Activists…
In addition, the tax authorities have been able to determine that Use a computer tool To conduct exchanges, the fact that Income from trading activity is higher than professional income incorrect not enough Considering that the taxpayer carries on the activity on a regular basis.
Finally, for people who trade cryptocurrency on a regular basis, taxes should change from January 1, 2023. provisions of Finance Act 2022 It states that as of this date, digital asset trading activity carried out on a regular basis will be subject to the non-trading earnings regime. This change is allowed to align tax system for Transactions in digital assets on it stock market transactions.
value added calculation
First, it must be borne in mind that the calculation of capital gains should be made on the basis of Every transaction is subject to tax. These actions can be taxable Reselling Digital Assets by Legal Bidding (Fiat)where Buying goods or services in cryptocurrencies.
Next, Article 150 VH bis from CGI provides a method for calculating capital gains from the sale of digital assets. Three important elements:
- selling price The actual selling price (the amount a digital asset is sold for in exchange for a legal issue, or the face value of the good or service purchased) minus transaction costs. You will be able to deduct the costs provided you are able to justify them.
- Purchasing price : This is the amount corresponding to the acquisition value of the assets already transferred.
- Total portfolio value The total value of the portfolio on the day of sale.
here she is algorithm Capital gain or loss from the sale of digital assets:
These amounts must be converted into Euros at the rate applicable on the day of the conversion. Thus, it is necessary to keep the history of the conversion so that we can determine the exchange rate if the conversion is made in dollars.
Illustrative example
Mr. JDC, a dealer occasionally bought 5,000 euros in digital assets in April 2020 (This amount is the total purchase price). In April 2021, thanks to the Bitcoin price rally, JDC had the opportunity to double its initial investment. and therefore has Pocket wallet A digital asset that contains Global value 10,000 euros.
So he decided to secure his situation by Referrer 4000 Euro of digital assets against the euro.
And therefore , Calculate the added value From Mr. JDC:
Mr. JDC issued a file A capital gain of €2000 on this taxable act. Thus, he will have to declare this capital gains on his tax return for 2021. After that, a flat tax of 30% will be applied to such capital gains. Thus, Mr. JDC will be responsible for a 600 euro tax for this process.
This account must be for capital gains or losses carried out for each operation Taxable, you will have to add it up and then calculate the amount of tax (multiplying the sum of your gains and capital losses by 30%).
To take the example of Mr. JDC, in addition to having to advertise his digital asset accounts with Cerfa 3916 bis, he will have to complete Form No. 2086 related ” Capital gains after disposing of digital assets He will then have to fill in Number of taxable transactions Implemented in 2021. In our case, Mr. JDC only implemented one. So he must complete the squares corresponding to task 1:
Once Mr. JDC completes this form, the file The amount of his capital gains It will be automatically reported on your tax return in the box 3 years (In the case of online advertising). The capital losses It will be reported on 3BN box. You must ensure that the amounts correspond to your accounts.
In some cases, it is not useless accompanied by a lawyer tax specialist or Use accounting aids Available online, in order to avoid errors.
Subject to adoption of the provision as is, the Finance Act 2022 provides that from 1 January 2023 it will be possibleChoose the progressive scale Income Tax (IR). To this rate is added the percentage of social security contributions, which equals 17.2%. Thus, this option will be useful only for taxpayers who declare an income of less than 25,711 euros per year. Please note that this provision will only apply to tax-generating transactions made from 1 January 2023. Thus, for transactions made in 2022, you will not be able to choose the IR scale and will be subject to the current tax regime, i.e. to flat tax by 30%.
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