France Mulls Crypto Wallet Reporting for Holdings Over €100,000
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French lawmakers have advanced a proposal requiring individuals to report self-custodied cryptocurrency holdings exceeding €100,000, aiming to curb tax evasion. The measure, if enacted, could impose f
French legislators have taken a significant step towards enhanced cryptocurrency regulation by backing a new reporting requirement for self-custodied digital asset holdings. The proposal mandates that individuals holding crypto assets valued at or above 100,000 euros (approximately $112,000 USD) must declare these holdings to tax authorities. This measure specifically targets assets not managed by regulated crypto-asset service providers, including those held in personal, non-custodial wallets, thereby expanding the scope of financial oversight for digital assets within the country.
The amendment, identified as I-CF821, was approved by the Finance Committee of the National Assembly. It seeks to integrate a new provision into France's general tax code, compelling taxpayers to disclose their cryptocurrency holdings based on their valuation as of December 31st each year. Non-compliance with this declaration requirement could result in substantial penalties, with fines potentially reaching up to 10,000 euros. This initiative is presented as a tool to combat tax evasion, particularly concerning capital gains derived from digital assets.
This proposed legislation stems from concerns highlighted by a recent parliamentary inquiry into the taxation of wealthy individuals. The inquiry revealed a significant disparity between reported crypto holdings and estimated capital gains, with figures suggesting that while crypto capital gains reached 3.5 billion euros in 2021, only 400 million euros worth of crypto assets were declared for tax purposes that same year. The lawmakers behind the amendment, Charles de Courson, Jean-Pierre Bataille, and Michel Castellani, aim to close this perceived loophole and ensure greater tax compliance within the growing digital asset sector.
While the Finance Committee's adoption of this amendment represents progress, it is crucial to note that the proposal still faces further legislative scrutiny. The crypto-related measures, including the wallet reporting rule, were among five such amendments approved by the committee. However, the broader revenue section of the 2027 budget bill, which encompasses these amendments, was subsequently rejected by the committee, indicating potential challenges ahead. The ultimate fate of the crypto reporting rule will depend on its reintroduction and approval during the upcoming parliamentary debates in the National Assembly.
The implications of this proposed regulation for France's crypto market could be substantial. By increasing transparency requirements for self-custodied wallets, French authorities aim to enhance tax collection and prevent illicit financial activities. For traders and investors, especially those holding significant crypto portfolios, this means an added layer of administrative responsibility and the potential for financial penalties if they fail to adhere to reporting mandates. The move aligns with a broader global trend of regulators seeking to gain better visibility into the digital asset space.
Moving forward, traders and cryptocurrency enthusiasts operating within or connected to France should closely monitor the legislative process. The next key events will be the parliamentary debates on the budget bill, where the crypto amendments must be re-submitted and voted upon. Understanding the exact valuation dates and reporting deadlines will be critical. Additionally, the success of this specific amendment could influence future regulatory proposals concerning digital assets, both within France and potentially across other European Union member states, particularly regarding self-custody and wealth thresholds.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.