France’s proposal to tax large crypto holdings has renewed debate over holders’ obligations; this note examines the new crypto tax framing and its compliance implications.
Summary
How will France crypto tax and unproductive wealth tax apply?
Lawmakers propose classifying sizable holdings as “unproductive wealth”, bringing digital assets into the existing wealth tax framework. The draft targets net assets above €2 million and proposes a 1% annual charge on the portion that exceeds that threshold.
The scope lists luxury items alongside tokens: taxable items include yachts, luxury cars and unused properties. Crucially, the bill counts unrealized gains when valuing holdings for the threshold and rate, a change that can widen the tax base for large but illiquid positions. For reporting context see Le Monde.
Does unrealized crypto tax apply to holdings? — The proposal treats unrealized appreciation as part of net assets. Valuation mechanics and accounting windows remain unclear and will need formal guidance. The treatment of unrealized gains will materially affect who crosses the €2 million threshold and when the 1% charge becomes due. Practically, taxpayers should retain time‑stamped exchange reports and on‑chain snapshots to substantiate valuations and the timing of unrealized gains, since authorities will expect audit‑grade trails.
What should owners do about crypto wealth reporting and foreign wallet reporting?
Owners will face expanded reporting requirements that explicitly cover holdings on exchanges and in foreign wallets. The law demands disclosure of all positions, including off‑shore custodial accounts and self‑custodied addresses. Transparency rules are clearly designed to limit avoidance by shifting assets abroad, so preparing reconciled records is essential.
Those affected must reconcile wallet balances and declare valuations that include unrealized gains to meet wealth tax compliance and crypto wealth reporting rules. Preparing accurate valuations and audit trails will be essential for satisfying disclosure standards and reducing dispute risk.
Note: consult a qualified tax adviser for position-specific guidance and to confirm filing requirements.
Tip: keep time‑stamped exchange statements and on‑chain snapshots to support valuations and the reference‑date value used for filings.
In brief: The draft labels large digital holdings as unproductive wealth, taxes net assets over €2 million at 1%, counts unrealized gains toward the taxable base, and mandates disclosure of foreign wallets and exchange accounts.
Practical next steps include reviewing holdings against the €2 million threshold, documenting valuations, and preparing for the 1% levy if applicable. Firms and individuals should prioritise robust controls to support tax compliance for digital asset holdings and to respond to foreign wallet reporting requests.
