Key Points
- French lawmakers are discussing a potential tax on unrealized capital gains for cryptocurrencies.
- The proposal would classify cryptocurrencies as “non-productive property,” subject to a proposed “unproductive wealth tax.”
The French government is currently considering a tax on unrealized capital gains for digital currencies, which could change the way assets like Bitcoin are taxed.
Proposed Tax Changes
The proposal under consideration would classify cryptocurrencies such as Bitcoin (BTC) as “non-productive property.” This category includes idle real estate and luxury goods like yachts. This classification would subject them to a proposed “unproductive wealth tax,” which would replace the existing real estate wealth tax.
The proposal, introduced during a debate on the 2025 budget in the French Senate, suggests taxing increases in cryptocurrency value even if the assets haven’t been sold. This is a shift from the current system, which only applies taxes on cryptocurrencies when profits are realized, such as when assets are sold.
Senator Sylvie Vermeillet, who sponsored the proposal, argued that this change would bring cryptocurrency taxation in line with other wealth categories.
Last month, Denmark’s Tax Law Council recommended proposing a bill to tax unrealized gains and losses on crypto assets under an inventory taxation model. This proposed bill seeks to address the unfair taxation of crypto investors and simplify the tax rules for crypto assets.
Current Status of the Proposed Tax
The Senate debate included an initial vote on the proposal. However, only supporting senators were present, so the vote does not yet represent a final decision or wider consensus. If the proposal moves forward, it would require approval from the French National Assembly before becoming law.
Unrealized gains refer to the increased value of an asset that hasn’t been sold. For example, if the value of Bitcoin rises after purchase but is not sold, the owner currently owes no taxes on that increase. The proposed tax would alter this by applying taxes on that paper gain, even if the asset isn’t converted to cash.
This debate is part of a global trend of governments trying to figure out how to regulate and tax cryptocurrencies. In the U.S., taxes on crypto only apply when assets are sold. Some countries, such as Germany and Portugal, provide tax exemptions for long-term holdings or classify digital assets more leniently.
