France Will Not Tax Crypto to Crypto Trades, But Will Tax Gains If Converted To Cash/Fiat
The French government has finally decided how to tax crypto trading. According to the French economy minister Bruno Le Maire, all trades between cryptos are exempt from taxes but the gains will be taxed when they are converted back into fiat currency.
Le Maire affirmed that the government believes that the moment in which the conversion happens is the best time to tax the investors. Also, the Value-Added Tax (VAT) will only be charged when a crypto is used to buy something.
This approach, the minister believes, will help to properly track the transactions. It is hard to do it in crypto to crypto trading, especially when people exchange their assets in different exchanges.
Another important development in the country is that the local regulators have decided to ban Facebook’s Libra because the controversial crypto project is not completely regulated by the local laws.
According to the minister, the main problem with Libra is that it risks putting the national sovereignty of the country at risk, so the asset should not be allowed to be used on “European soil” with the current state of how it works. In case the project is improved, however, it seems that Facebook has a slight shot of having the French people using its token.
In related news, Portugal has also started to move forward on this same topic. The local tax authority has recently affirmed that cryptos will not be taxed in the country, which made the local investors quite satisfied that Portugal will follow the same path as France.