The class of digital assets, to speak crypto-currencies like Bitcoin and Ethereum, has entered the 1 st January 2019 in the regulatory framework. To be fiscally compliant, digital currencies and your cryptocurrency accounts must be declared, and a crypto-specific scale is now available through income tax.
In 2021, this tax compliance will not change. It will concern your crypto-assets, but also your various accounts, in particular if they are located abroad. The opening of the income tax return begins on Thursday, April 8, 2021.
In this tutorial, we will explain in detail how to declare your crypto-currencies on the occasion of income taxes 2021 . The forms and boxes concerned, the amount of the tax, the alternatives to not be taxed on the earnings of its Bitcoin and other crypto-currencies ... we will detail everything.
Cryptocurrencies: the context in 2021
In 2020, Bitcoin took off, followed by Ethereum. The stars have aligned for cryptocurrencies: PayPal, the largest payment service, has started accepting and selling digital currencies on its platform; the boards of national currencies are turning at full speed to face the crisis; and Bitcoin has won the hearts of big companies such as some banks, so millions of individuals have joined the adventure.
2021 is just the next logical step: Tesla has announced that it has invested $ 1.5 billion of its cash in Bitcoin while Goldman Sachs opens a department related to cryptocurrency trading. An analysis at JP Morgan even recommends investing 1% of its savings in the famous electronic currency. The enthusiasm for these new assets is also felt in France, where thousands of individuals have invested in Bitcoin.
If you've invested in cryptocurrencies (or have held assets for a longer period of time) and secured a profit, the question of tax compliance has certainly crossed your mind. How to declare your crypto-currencies for taxes in 2021? To find out everything, here is a complete tutorial to learn more about the regulatory framework for Bitcoin and other crypto-currencies in French taxation.
It will also allow you, if the rules do not change for the 2022 taxes, to ensure that you follow the right steps so as not to be taxed in the 2021 fiscal year, even while recovering your profits.
Crypto-currencies: declare your Bitcoin and Ether
“Digital assets”, what are we talking about?
Bitcoin, Ethereum, Litecoin, Cardano, Polkadot, Ripple ... all crypto-currencies and tokens that were available for purchase in 2020 have been grouped under the category of digital assets, which are taxed at 30% author. by the "flat tax" (or single lump sum deduction).
This taxation is part of income taxes, and the 30% recovered concentrates 12.8% tax and 17.2% social security contributions. It is this same flat tax that is found on other more traditional asset classes such as equities or derivatives.
The taxation of digital currencies
Since joining the 1 st January 2019 in France, the category of digital assets must be taken into account in the income tax. The first point to note about this statement is that French taxation focuses only on realized gains.
This is an essential point to understand: as long as you have not returned your digital currencies to national currencies like the Euro, or that you have not made money on the conversion against your investment of departure, then you will not be taxed. In addition, if you made losses on cryptocurrencies, you can also declare it.
To find out, the tax authorities will ask you to report all the conversions made during the year 2020. You will therefore have to note the various gains made, from the moment you have exchanged your crypto-currencies in one national currencies, the fiat currency. At the end of the day, the final result between capital gains and losses will be the amount assumed for taxation. If it is negative, you will not be taxed.
Another important point to note: if you receive a salary in crypto-currencies or if you mine, then you must declare this income, even if it is not converted into fiat currency.