If you converted bitcoins, ether and other cryptocurrencies to euros in 2020, you must report your profit or loss to the tax authorities. However, there is a solution well known to seasoned investors to legally avoid and defer tax.
As of 2019, profits generated from buying and selling cryptocurrencies such as bitcoins, lether or even dogecoin are not eligible for a one-time 30% withdrawal. Or the same tax rate as for most more traditional investments, but without the ability to tax capital gains from cryptocurrencies with a progressive scale of income tax. Another difference: While investors can rely on the annual income statement issued by their financial intermediaries for their banking book, life insurance, PEA, and other current savings products, they must tax their own income. …
And the task is tedious, especially for those who are active crypto investors and regularly arbitrate in accordance with the current valuation fluctuations. Because, in addition to announcing the total amount of their income for the calendar year, they must also indicate in a specific document the total number of completed conversions of cryptocurrency into euros. and a recipe corresponding to each of these operations.
On the other hand, if they stay in the cryptocurrency universe and, for example, resell their ethers to buy bitcoins, crypto investors do not have to declare this to the tax authorities, and they are not taxed on these crypto-crypto transactions. Today, in France, capital gains are taxed on refunds in eurosfor example, to a bank or payment account, explains MoneyVox Claire Balva, co-founder of Blockchain Partner, a cryptocurrency consulting firm acquired last March by KPMG.
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Cryptocurrencies indexed against the dollar and euro
However, there is a solution to protect your profits from the high volatility inherent in cryptocurrencies without being subjected to the straitjacket of tax regulations: stablecoins… We are also talking about cryptocurrencies, but the peculiarity of which is that they are indexed by a traditional currency such as the dollar or, less often, the euro. Their stability is ensured by a guarantee mechanism, which may consist in the fact that the exact amount of money required to convert all stablecoins is kept in a bank account.
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When you stay on the blockchain, for example with stablecoin, you are not funded. therefore investors prefer to exchange their bitcoins or ethers for dai or dollars [stablecoins dollar, ndlr] not in euros. “This is a mechanism known in the cryptocurrency universe,” explains Claire Balva. If this method is legal, does the Minister of Public Accounts consider it a good thing? When asked about the possibility of deferring sentencing in this way, he still has not responded to our request.
At Hexagon, the euro stablecoin market is still very small. In mid-March, there was a promising filming announcement for Young Lug, in which the Casino is the shareholder launching its euro stablecoin (1 lugh = 1 euro). It is currently available to individuals and companies investing through the Coinhouse broker. Since launch on March 18 Created 6 mln.… Today, 40% of transactions at Coinhouse are made with lugh, explains Olivier Ou Ramdane, co-founder of Lugh. By comparison, in the last 24 hours it has changed to nearly $ 2 billion due ahead of schedule.
Specifically, Coinhouse benefits from the lugh offering on its platform. This allows you to store your customers’ savings with this ersatz euro. Because, without bank authorization, this crypto broker is not allowed to store their euros directly.