French lawmakers narrowly approved a tax on stablecoin swaps, classifying them as taxable events starting in 2027.
Tax on Stablecoin Swaps Approved by French Assembly
In a closely contested vote, France's National Assembly has approved a budget amendment that will classify swaps of cryptocurrencies for MiCA-regulated stablecoins as taxable events starting January 1, 2027. The decision was made by a single vote, with 38 deputies supporting the amendment, 37 opposing it, and 25 abstaining.
The amendment, known as I-3898, allows the government to tax gains made from swapping cryptocurrencies for stablecoins. Currently, transactions between cryptocurrencies are tax-free as long as euros are not involved. Under the new rules, any gain from these swaps will be taxed under France's flat tax rate, which has recently increased from 30% to 31.4% due to changes in social charges on capital income.
The legislation stipulates that the tax will be based on the difference between the value of the stablecoins received and the cost of the cryptocurrencies given up. Additionally, it requires that each cryptocurrency sold is treated individually regarding its purchase price, allowing for averaging in cases where multiple purchases of the same coin have occurred.
Proponents of the amendment, led by Nicolas Sansu of the left-wing GDR group, argue that stablecoins should be treated as conventional investment vehicles. They contend that current legislation allows for gains to escape taxation, creating a loophole. Other countries, including the UK and Italy, have enacted similar measures, they noted.
However, the French government has expressed opposition to the amendment. Public Accounts Minister David Amiel called for it to be withdrawn, highlighting the need for a legal definition of stablecoins and the importance of tracking portfolio reallocations.
Ongoing Legislative Process
This amendment is part of a broader legislative process, as the finance committee previously backed Sansu's proposal alongside another measure to extend France's exit tax to households with crypto holdings exceeding €800,000. The budget's revenue section was rejected by the committee, necessitating a reintroduction of the stablecoin measure.
Another proposed amendment would require crypto holders to declare self-custodied assets valued at €100,000 or more, facing penalties for non-compliance. This has raised concerns within the crypto community, particularly in light of security issues related to high-profile crypto kidnappings in France.
As it stands, these measures are not yet law. The Assembly is expected to vote on the complete revenue section of the budget on Tuesday before it moves to the Senate for further consideration.
