France could introduce new tax rules for cryptocurrency owners who plan to move abroad. The proposed changes would target wealthy investors and extend the country’s existing exit tax to digital assets such as Bitcoin. If approved, the rules could require some individuals to pay tax on gains that have accrued but have not yet been realized through a sale.
France already has an exit tax system that applies to certain investments, including shares, held by people who leave the country. The existing rules generally cover individuals with qualifying investments worth more than €800,000 ($897,420). The aim is to prevent wealthy residents from avoiding French taxes by moving abroad before selling assets that gained value while they lived in the country.
The proposed changes would bring cryptocurrency holdings under a similar system. Investors whose qualifying crypto assets exceed the €800,000 threshold could face tax obligations when they relocate. The rules would cover digital currencies held on cryptocurrency exchanges outside France, as well as assets stored in personal wallets. Individuals who have lived in France for at least six of the previous ten years would also fall within the proposed requirements.
However, certain investors could receive temporary relief. People moving to other European Union countries and some eligible destinations may be allowed to postpone payment. Depending on the conditions, the tax obligation could eventually be cancelled if they hold on to their assets for the required period. The proposal has not yet clearly established the applicable tax rate or whether additional social charges would apply.
Another proposed measure would increase reporting requirements for privately controlled crypto wallets. Individuals holding at least €100,000 ($112,180) in these wallets could be required to declare them annually. Failure to comply could result in penalties of up to €10,000 ($11,220). Supporters believe the requirement would help tax authorities identify undeclared wealth and improve oversight of digital asset ownership.
The wider tax proposals also seek to change how cryptocurrency transactions are treated. One suggested measure would make exchanges between cryptocurrencies and stablecoins taxable. Stablecoins are digital assets designed to maintain a relatively steady value, often by being linked to traditional currencies. Under the proposed approach, converting one crypto asset into a stablecoin could trigger a tax obligation even without converting it into euros.
Lawmakers have also discussed allowing investors to offset certain cryptocurrency losses against taxable gains over ten years. Additional penalties could apply to individuals and businesses that fail to provide documents requested by tax officials.
These measures are still proposals, not established law. Although a parliamentary committee has approved them, further consideration and votes in France’s National Assembly and Senate are required. The final legislation may therefore differ from the current proposals.
If adopted, the changes would introduce stricter requirements for crypto investors, particularly wealthy individuals considering leaving France. They could also increase reporting obligations and affect how investors manage their digital assets.
These proposed changes are likely to be closely watched by firms like Riot Blockchain Inc. (NASDAQ: RIOT) as they could impact some of the individuals and entities they do business with in the EU.
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