Cryptocurrencies: beware of your reporting obligations!
For several years now, France has been engaged in an attempt to regulate crypto-currencies. While there is no doubt in the minds of taxpayers that capital gains realized on the sale of crypto-currencies must be declared, the obligation to declare ownership of digital asset accounts is not always respected.
The content of the reporting obligation
As of January 1, 2020, Article 1649 bis C of the French General Tax Code (CGI) states that individuals, associations and non-commercial companies established in France must declare the references of digital asset accounts opened, held, used or closed abroad, at the same time as their income or profits.
The term “ownership” is understood in the broadest sense, since it concerns not only the account holder, but also the co-account holder, the beneficial owner or even the beneficial owner.
Similarly, “use” is defined as at least one transaction carried out on the account during the reference period.
This reporting obligation translates into the requirement to complete form 3916-BIS for each digital asset account held, such as Binance, Gate.io, Kraken etc.
It should be pointed out that all foreign-based platforms must be declared, even if they have been granted the “digital asset service provider” (PSAN) status by the AMF.
The information to be included on the 3916-BIS form is not always easy to find, depending on the platform. For example, it is necessary to indicate:
- Account number (generally available on the profile Dashboard)
- Opening date
- Name of the organization managing the account
- Address of managing organization
- URL of the organization’s website
Penalties for failure to declare
Article 1736 of the CGI provides for the following penalties:
- a fine of €750 per undeclared account or €125 per omission or inaccuracy in the information provided, up to a maximum of €10,000 per declaration.
- the amounts of €750 and €125 are increased to €1,500 and €250 when the market value of digital asset accounts opened, held, used or closed with companies, legal entities, institutions or organizations established abroad exceeds €50,000 at any time during the year covered by the reporting obligation.
These amounts must be understood per account and per year.
With the 2022 declaratory campaign underway, taxpayers holding cryptocurrencies are invited to carefully check their declaratory obligations with a view to regularizing their situation.
As a reminder, the deadline for making your declaration varies depending on your département of residence:
- Until Tuesday May 24, 2022 for departments 01 to 19.
- Tuesday May 31, 2022 for departments 20 to 54 (including 2A and 2B).
- Until Wednesday June 8, 2022 for departments 55 to 974/976.
If you have never declared these accounts, it is urgent to regularize the situation for previous years and for the current year.
Our tax lawyers are on hand to help you declare your digital asset accounts. Our meetings can be held face-to-face or by videoconference. You can make an appointment directly online at www.agn-avocats.com.
AGN AVOCATS – Tax Department
09 72 34 24 72