France requires Bitcoin businesses to identify clients for taxation

France is reportedly requiring businesses dealing in the transfer or exchange of bitcoins to have all clients identified via ID

France is reportedly requiring businesses dealing in the transfer or exchange of bitcoins to have all clients identified via ID before opening accounts. This comes part and parcel with new rules on the taxation of bitcoins and virtual currencies, with the identification requirements sought to ensure bitcoin-based profits don’t escape the tax net.

Like the US, France will be viewing bitcoins as an asset. As such, they will be subject to capital gains tax. In addition, France’s wealth tax will be applied to individuals whose bitcoin assets contribute to their wealth reaching the threshold of the equivalent of 800,000 euros.

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The wealth tax is evaluated on a graduated scale. 0.55% is charged on the amount between €800,000 and €1.3 million. The rate maxes out at 1.8% for amounts exceeding €16.79 million. It is believed that the levy brings in 1.5% of France’s total tax revenues.

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Wealth tax is levied by but a handful of countries. It was established by France’s Socialist Party in the 80’s and its application and rules have changed intermittently since then, depending on who’s in power. France is currently ruled by the Socialist Party and Radical Party of the Left.

The Bitcoin community in France is said to be cautiously optimistic about the changes, as they “add legitimacy” to bitcoin operations.

French authorities appear to be exercising greater vigilance over Bitcoin activity in the country. They recently shut down and arrested the operators of a local Bitcoin exchange which was alleged to be lacking the requisite money services licensing.

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