The French government has announced a tax reform plan Thursday, which would reduce the tax rates on revenues generated by cryptocurrency transactions, and cut the high-band rate from 45 percent to 19 percent.
The tax reform announced by the French Council of State may just be an opening bid of a long path, but it delivers an aggressive cut that cryptocurrency enthusiasts have been clamoring for.
After adding contributions to the social welfare system, the new rate goes up to nearly 35 percent, which is still a 25 percent reduction of the original fees, according to a report from French outlet Le Monde.
Did COVID-19 Save the Forex Industry?Go to article >>
The stimulative effects of the tax cuts come as France changed the classification of bitcoin and its ilk, which currently fall into the “moveable property” category, meaning that it is subject the flat tax of 19 percent on capital gains. Before that, cryptocurrency gains were considered “industrial and commercial profits” while occasional transactions constituted as “non-commercial profits.”
Bitcoin was trading near the $9,500 mark on Friday following the news, as cryptocurrency investors were optimistic that regulation may become less stringent ahead.
Earlier in January, France’s Finance Minister Bruno Le Maire debated cryptocurrency and said Germany and France will jointly push for global regulation during the summit of the G20 in Argentina.
At the time, Le Maire told reporters 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.”