The mass adoption of cryptocurrencies is determined not just by an extension of the user base, but also by an inclusive policy and tax regime.
A French politician has now proposed a relaxation in the country’s current tax obligations on cryptocurrencies. This could drive citizens to increase their usage and accumulation of the asset class.
The French National Assembly’s Pierre Person recently tabled a series of amendments to the current tax regime for crypto-assets that was introduced in 2019. While referring to the current tax laws as an injustice, he said,
“Their adoption would simplify the life of crypto asset holders and strengthen the attractiveness of this sector in France.”
In his plan for simplifying crypto-taxes in France, Person has chosen his first area of focus as the distinction in the qualification of investors as professionals and private. Due to the significant capital gains generated because of the volatility of crypto-asset prices, many investors fear they could be classified as professional investors and be taxed as much as 70%.
According to Person, this area needs simplification. For this, he proposed,
“… the assessment of the professional or non-professional nature of the activity of buying-reselling digital assets should thus be based more on qualitative criteria.”
Moreover, he also wants to create a specific tax regime for crypto-payments as the ones in action are currently very restrictive. Right now, paying for goods and services through crypto creates a tax obligation, leading to long procedural requirements.
Person has instead proposed that crypto-payments should not be taxed if their sum does not exceed €3,000. This would allow users to make transactions through their crypto-cards easier.
To preserve France’s indulgence in the crypto-industry, the official also wants the government to allow users to carry forward their net capital losses for a period of up to 10 years, which has to currently be attributed to the same year.
Additionally, the politician suggested that crypto-companies must be exempt from paying taxes after conducting transactions through virtual currencies. Also, he demanded that it be made easier for French companies to pay their employees and partners in digital assets.
While cryptocurrency regulation in the country currently comes under the gambit of the French government, the European Union wishes to create a new EU-wide regulatory framework for crypto-assets.
However, this isn’t sat too well with most European countries, with over half of the respondents in a survey preferring the governance of their own country instead.