Bitcoins, NFT… how to declare them to the tax authorities? – Better Live Your Money

If you sold cryptocurrencies in 2021, you must report your earnings to the tax authorities, if you sold “NFTs” as well. The point on the declarations that you must complete.

Pending the tax reform which will come into force on 1er January 2023, the gains you made in 2021 from the occasional sale of digital assets, and in particular cryptocurrencies (Bitcoins, Ethereum, etc.), will be taxed according to the regime in force since 2019. They will be subject to this been to a single flat-rate deduction of 30% on their net amount of your capital losses for the year. To allow the tax authorities to calculate your tax, you must declare these gains on certain annexed declarations that you will attach to your income statement no. 2042.

Declarations n° 2086 and n° 2042 C

You must calculate your taxable capital gain for 2021 yourself by filling in declaration no. tax household during the year. It will also allow you to calculate your overall annual capital gain or loss, all transfers combined, to be reported in box 3AN (capital gain) or box 3BN of a supplementary declaration no. 2042 C. You must return these two declarations in the same forms and deadlines as your income statement no. 2042. If you declare your income by internet, you can complete it online. If you declare your income on paper, you must obtain them from your public finance center or download them from the tax website if the tax authorities have not sent them to you by post at your home.

Good to know. If your crypto sales did not exceed €305 in 2021, your capital gain is tax exempt. In this case, you do not have to report it on a declaration n° 2042 C, but you must still fill in appendix n° 2086. taxation and you have nothing to declare.

Declaration no. 3916-3916 bis

If you reside in France and have opened, held, used or closed a digital asset account abroad in 2021, you must also attach to your declaration n° 2042 an annexed declaration n° 3916-3916 bis. You must complete one for each account held abroad by members of your tax household. In addition, you must tick box 8UU located on page 4 of your declaration no. 2042. Again, this appendix can be completed online or on paper. If you do not return it, you will be liable to a fine of €750 per undeclared account or €125 per omission or inaccuracy, which can go up to €10,000. Its amount will be doubled (€1,500 and €250) if the value of your overseas accounts has exceeded €50,000 at any time during 2021.

Declarations n° 2031-SD and n° 2042 C-PRO

The above rules do not apply to you if you exercise the activity of purchase-resale of digital assets on a regular basis and not occasionally, because the tax authorities then consider that you exercise a commercial activity. In this case, your earnings are taxable as industrial and commercial profits (BIC) and not subject to the PFU. You must therefore complete the same declaration as merchants and craftsmen: declaration of result no. simplified “micro-BIC” scheme. The first must be completed electronically and returned to the tax authorities before May 19, 2022. The second can be completed in the same forms and deadlines as your declaration n° 2042.

Good to know. Gains from the sale of cryptocurrencies obtained in return for your participation in the creation and operation of a digital asset system (so-called “mining” activity) are taxable in the category of non-commercial profits (BNC). You must enter them in a declaration of results no. 2035-SD (and its annexed tables) if you come under the controlled declaration regime, and in an additional declaration no. 2042 C-PRO if you come under the simplified “micro- BNC”.

NFT: taxation to be specified

In the family of cryptoassets, NFTs (“non-fungible tokens” or “non-fungible tokens” in French) have experienced remarkable growth over the past two years, and they are recording record transactions. The problem is that the taxation applicable to the gains from the sale of these virtual assets is uncertain. On April 15, 2021, Senator Les Républicains de l’Oise, Jérôme Bascher, questioned the Ministry of Economy and Finance on the conditions for taxing these gains, indicating that three diets could be considered: that applicable to the sale of cryptocurrencies, that applicable to the sale of movable property and that applicable to the sale of works of art. On January 25, 2022, the deputy Les Républicains de l’Orne, Véronique Louwagie, also asked the ministry about the possibility ofequate NTFs to works of art. For the time being, however, the ministry has not decided. If you sell NFTs, it is therefore essential to approach your public finance center (or call 0809 401 401) to find out how to declare your earnings. It will also tell you which declaration to complete: no. 2042 C if the PFU applies, no. 2048-M-SD or no. 2092-SD if the capital gains regime applies, and no. 2091- SD in case of application of the tax on precious objects.

Depending on the solution chosen, the tax and the social contributions to be paid will obviously not be the same. In the first case, your annual capital gain will be exempt if your sales for the year do not exceed €305 and taxed at 30% otherwise. In the second case, your capital gains will be exempt if your sale price per NFT does not exceed €5,000 and taxed at 36.5% otherwise, less a reduction of 5% per year of detention at beyond the second. In the third case, finally, you will bear a tax of 6.5% on your sale price only if it exceeds €5,000, except option for the application of the capital gains regime on furniture.

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Bitcoins, NFT… how to declare them to the tax authorities? – Better Live Your Money


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