France’s new cryptocurrency wealth tax imposes a 1% annual levy on holdings over €2 million, classifying digital assets as ‘unproductive wealth’ alongside gold and yachts. This marks the first time crypto is explicitly targeted, aiming to promote productive investments but sparking concerns over innovation stifling.
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Amendment I-3379 passed by France’s National Assembly with a 163-150 vote, adding crypto to the wealth tax base.
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The tax applies to net wealth exceeding €2 million without exemptions for business-related tokens or incentives.
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Experts warn of potential capital flight and penalties on ecosystem builders, with final adoption due by December 31, 2025.
Explore France’s cryptocurrency wealth tax: a 1% levy on crypto holdings over €2M as ‘unproductive wealth.’ Learn impacts on investors and innovation. Stay informed on global crypto regulations—subscribe for updates today! (152 characters)
What is France’s Cryptocurrency Wealth Tax?
France’s cryptocurrency wealth tax is a newly adopted amendment to the 2026 Finance Bill that introduces a 1% annual tax on digital asset holdings exceeding €2 million in net wealth. Passed by the National Assembly on a narrow 163-150 vote, this measure explicitly includes cryptocurrencies under the “unproductive wealth” category for the first time, alongside assets like gold, yachts, and classic cars. Unlike the previous 30% tax on crypto sales, this levy targets unsold holdings to encourage shifts toward productive investments, such as long-term rental properties, which receive exemptions.
How Does the Unproductive Wealth Tax Affect Crypto Holders?
The unproductive wealth tax on crypto in France applies a flat 1% rate to net wealth above €2 million, a threshold raised from the prior €1.3 million limit. This change, proposed by centrist MP Jean-Paul Mattei of the Les Démocrates group, integrates digital assets into Article L.54-10-1 of the Monetary and Financial Code without distinguishing between passive investors and active participants in the crypto ecosystem.
For instance, the tax does not exempt tokens acquired through business activities, team vesting schedules, or network incentive programs, leading to complications for founders and developers. Joe David, CEO and Founder of Nephos, a professional services firm specializing in digital assets, emphasized that this approach “risks oversimplifying the crypto landscape by failing to distinguish between passive investors and ecosystem builders whose tokens represent years of contribution, innovation, and risk-taking.” He highlighted that such a policy could inadvertently penalize productive capital essential for France’s digital economy advancement.
Supporting data from industry analyses shows that France’s crypto sector has grown significantly, with over 10% of the population holding digital assets as of recent surveys. However, this tax structure deviates from global standards, which often treat crypto gains as capital income rather than annual wealth levies on holdings. Burçak Ünsal, Managing Partner at ÜNSAL Attorneys at Law, noted that the amendment overlooks token issuers and founders who hold assets operationally, potentially creating an “economically unjust” burden. She pointed out the absence of clear definitions between occasional and professional traders, which would be assessed case-by-case based on trading volume, frequency, and income proportion from crypto.
Without forthcoming implementing decrees or guidance, Ünsal warned of ongoing “tax-structuring risk” for businesses reliant on token models. Austin Yuanlun Yin, a US-licensed CPA and President of the Global Council on Crypto Taxation, added that the reform “risks punishing innovation” by equating dynamic assets like Bitcoin with idle luxury items. “France is sending a message that capital held in crypto is idle rather than dynamic. That is inaccurate and shortsighted,” Yin stated, advocating instead for recognition of crypto’s role in funding startups and decentralized infrastructure. He estimated that heavy taxation could accelerate capital flight, as digital assets can be transferred across borders in minutes, potentially deterring talent and investment from France.
Frequently Asked Questions
What Threshold Triggers France’s Cryptocurrency Wealth Tax?
The tax applies to net wealth exceeding €2 million ($2.2 million), including cryptocurrency holdings. This is an increase from the previous €1.3 million threshold, and the 1% annual levy covers digital assets without sales requirements, affecting high-net-worth individuals for the first time in this explicit manner. (48 words)
Will France’s Wealth Tax on Crypto Drive Investors Away?
Yes, experts predict it could prompt capital flight due to the ease of moving digital assets internationally. By taxing holdings annually at 1% without business exemptions, the policy may discourage long-term innovation in France’s crypto sector, as investors seek more favorable jurisdictions globally. This natural progression aligns with concerns from financial advisors on borderless asset mobility. (72 words)
Key Takeaways
- Historic Inclusion: France’s amendment marks the first explicit targeting of cryptocurrencies in its wealth tax framework, classifying them as “unproductive wealth.”
- No Exemptions for Builders: The lack of carve-outs for operational tokens risks complicating tax treatment for crypto founders and projects.
- Path to Finalization: The bill advances to the Senate, with lawmakers having 70 days for deliberations before required adoption by December 31, 2025—monitor for potential revisions.
Conclusion
France’s cryptocurrency wealth tax represents a pivotal shift in how digital assets are regulated, integrating them into the unproductive wealth tax category with a 1% annual levy on holdings over €2 million. While intended to steer investments toward productive avenues, the measure has drawn sharp critiques from experts like Joe David of Nephos and Austin Yuanlun Yin of the Global Council on Crypto Taxation for potentially hindering innovation and prompting outflows of capital and talent. As the bill progresses through Senate review and back to the National Assembly, stakeholders should prepare for clearer guidance on distinctions between investor types. Looking ahead, this development underscores the evolving global landscape of crypto taxation—staying proactive with compliance will be key for investors navigating these changes.
