France has advanced a crypto tax proposal that would make gains from certain cryptocurrency-to-stablecoin swaps taxable from January 1, 2027. The National Assembly’s finance committee approved it on October 7, but Parliament must pass the measure before it takes effect.
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The measure targets exchanges where investors receive electronic money tokens covered by the European Union’s Markets in Crypto-Assets (MiCA) regulation. These tokens seek to hold a stable value against one official currency.
What Would France’s Crypto Tax Change?
Amendment I-CF1826 will be an amendment to Article 150 VH bis of the tax law of France. It was introduced by Nicolas Sansu et al. in the 2027 budget proposal on October 7.
Currently, taxes are levied on the sales of the cryptocurrencies in exchange for fiat currency and their use for the purchase of products and services. However, exchanges of the digital assets where there is no monetary difference are usually deferred.
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The amendment will also change the method of determining the taxable gain. The sale value is determined by taking into account the consideration received, less the eligible fees. For those cryptocurrencies purchased at different amounts, the average cost is proposed.
Why Are Stablecoin Conversions Targeted?
These currency-backed tokens will enable investment in assets that are meant to replicate fiat currencies with the cryptocurrency profits. The idea is that current deferrals result in non-taxation of the profits during the conversion. Their cryptocurrency tax reform proposes taxing token swaps in the same way as fiat currency sales.
By the definition in the text, these assets are limited to electronic money tokens under MiCA legislation and do not include all assets called stablecoins. This kind of electronic money token is defined as those referring to one official currency, while other forms of crypto assets remain unaffected by the proposed amendment.
The provision also allows for a transition rule for assets owned before 2027. Taxpayers could use the cost of purchase recorded or allocate the cost of the entire portfolio among these assets as of December 31, 2026.
How Would the 31.4% Crypto Tax Apply?
According to the French tax administration, the private gains realized on digital assets are subject to a flat tax rate of 31.4%. This is made up of 12.8% income tax and 18.6% social security contribution. Qualified investors may opt to be taxed using the progressive income tax scale.
The crypto tax amendment would not charge 31.4% on the total value of the transaction. It would relate to the gains realized after considering the acquisition costs and qualified expenses. The exact tax obligations would depend on the investor’s transactions.
The amendment would determine the acquisition cost of the tokens received during a taxable transaction. The amount would be determined by the cost incurred in the swap with adjustments for cash paid. This would apply to qualified transactions starting January 2027.
What Other Crypto Tax Changes Are Under Review?
One additional amendment will require the disclosure of self-held wallets that have cryptocurrency with a value of at least €100,000 at year-end. The document provides the penalties of up to €10,000 for reporting violations. The parliamentary register shows the proposal pending discussion and not committee approval yet.
Another committee-approved amendment will provide for extending the exit tax to some crypto holders leaving France. These people should have resided in France for no less than six years out of the last ten and possess portfolios worth more than €800,000. The amendment plans its implementation beginning from January 1, 2027.
Another separately adopted proposal allows treating crypto losses as securities by applying them to gains on digital assets for the next ten years. Under the current provisions, such a treatment is usually restricted to gains realized during the same tax year.
The proposed effective date of the stablecoin amendment is January 1, 2027. Committee approval of the budget is far from being the final adoption of the legislation; the budget is still to be discussed in parliament.
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