France Introduces a Major Drop In Tax Rates on Crypto Earnings from 45% to 19%

In a major move, the French government on Thursday announced a tax reform that would provide a huge relief and bring cheer to the crypto investors in the country. The government of France has considerably slashed the tax rates from 45% to just 19% on earnings made through cryptocurrency investments.

According to the report from a local publication Le Monde , the French Council of State said that all the profits derived from the sale of digital currencies should be considered as the capital gains of “movable property”. This new consideration has led to this significant drop in the tax rates.

Right now the profits derived from trading cryptocurrencies are classified as "industrial and commercial profits" (BIC), while from any other normal transactions are being treated as “non-commercial profits”.

The publication notes: “The sale of ‘bitcoins’ [fell under] the principle from the category of capital gains of movable property.”

It also states that the decision to cut the crypto tax-rates arrived after the citizens of France made an appeal earlier this year to the highest regulatory body in the country in order to change the regulations for crypto transactions that were put in place since July 2014.

However, it has to be noted that the earnings made through the crypto mining activities have also been exempted from this 19 percent flat tax rate. Moreover, the Council of State in its tax reforms clearly mentions that for higher-band taxpayers, the crypto gains could be as high as 45 percent.

Earlier this year in January, Finance Minister of France - Bruno Le Maire - debated digital currencies and said that France and Germany will together push for a collaborative global regulation in this space during the summit of G20 in Argentina.

At that time Le Maire reported that authorities “will have a joint Franco-German analysis of the risks linked to bitcoin, regulation proposals and these will be submitted as a joint proposal to our G20 counterparts at the G20 summit in Argentina in March.”

On Friday, Bitcoin prices soared to a high of $9,500 as a new wave of optimism was instilled in crypto investors with a hope of less stringent regulations coming ahead.