How to Declare Your Cryptocurrencies?

Since 2019, the income tax return has included a new type of income to declare: digital assets. This declaration became compulsory starting in 2020, in respect of income generated in 2019. Over the years, the tax regulation of cryptocurrencies has continued to evolve in order to better regulate transactions that were still in a tax grey area.

Although the new regulations have provided useful clarifications, the legal uncertainty has not entirely disappeared.

Understanding the cryptocurrency declaration system can help you comply with the regulations in force, which remain complex and often counter-intuitive. A properly completed declaration in principle limits the risk of penalties, which can be heavy. Before making any declaration or decision, it is advisable to consult a lawyer to analyse your situation.

Taxation of cryptocurrencies: what do you need to know?

First of all, it is important to understand that the tax rules applicable to occasional traders and to habitual investors are completely different.

For habitual traders, the "standard" tax rules for professionals in principle apply. This topic is not covered in this article, which is aimed solely at occasional investors in cryptocurrency.

The declaration of cryptocurrency gains or losses is in principle made at the same time as the standard income tax return.

Form 2086 is used to declare cryptocurrency gains or losses.

Form 3916-bis is used to declare cryptocurrency accounts located abroad (for example accounts opened with major platforms established abroad).

The obligation to declare cryptocurrencies together with your income in principle applies only to occasional investors. The declaration applicable to professionals is very different and is not covered here.

Access to forms 3916-bis and 2086 is in principle at step 3 of your income tax return, by clicking on "DECLARATIONS ANNEXES" (additional declarations), then selecting forms 2086 and 3916-bis and clicking on "Valider" (confirm).

You will then have access to these forms: when you click on "suivant" (next), the forms will appear in the left-hand column of the screen; simply click on them to access them and make your declarations.

A closer look at form 3916-bis

Each cryptocurrency account opened abroad is in principle to be declared every year. All accounts opened on foreign exchanges (for example the major platforms) are in principle covered by this reporting obligation. In the vast majority of cases, cryptocurrency accounts are opened with foreign institutions: there are in fact very few French exchanges in common use.

Once the cryptocurrency accounts have been declared, any cryptocurrency gain or loss is in principle also to be declared.

A closer look at form 2086

The obligation to declare one's cryptocurrency gains has always existed, even for occasional investors.

Up to and including 2018 gains, however, there was no legal framework specifically dedicated to cryptocurrencies. The forms to be used were the 2048-M, and the declaration process was similar to that applicable to any ordinary item (for example, the sale of a collectible piece of furniture).

The forms were therefore very poorly suited to the reality of cryptocurrencies.

From 2019 gains or losses, which were to be declared in 2020, things changed and a more suitable legal framework was put in place, with a form that was also better suited: form 2086.

Since 2020, i.e. in respect of 2019, every French tax resident who has made taxable disposals is in principle required to declare their cryptocurrency gains or losses every year.

Exchanges between cryptocurrencies are in principle not taxable. They do not, as a general rule, have to be reported on form 2086.

Only exchanges of cryptocurrencies for fiat, goods or services are in principle taxable. It is therefore these that, in principle, appear on form 2086.

Example of an exchange that is in principle not taxable: exchanging 10 BTC for 150 ETH.

Examples of exchanges that are in principle taxable: exchanging 10 BTC for €380,000, or $400,000, or 370,000 pounds sterling, etc.; exchanging 1 ETH for a computer; withdrawing cash from an ATM using a major platform's payment card (for example); paying at the supermarket with a major platform's Visa card; sending 1 ETH to pay for a trip abroad, etc.

Although the regime is now better suited, there unfortunately remain many legal grey areas. The tax authorities have since published and updated their administrative guidance (BOFiP BOI-RPPM-PVBMC-30, 23 April 2024), providing numerous clarifications on the regime now applicable.

In the meantime, many points remain unanswered. The aim is not to discuss them in this article, which is intended to be simple and educational. In situations where the stakes are highest, using a tax lawyer seems advisable, as each situation has its own particularities, and therefore its own risks.

Whether you prepare your form 2086 yourself, use an online tool or engage the services of a tax lawyer, the most important thing is often to have all the supporting documents, very precise ones, explaining "down to the last decimal" the figures you have entered on your form 2086. After you have filed your 2086, a tax audit remains possible, particularly where the stakes are high. You might then need to justify and explain your declaration down to the last decimal.

Furthermore, French tax rules do not, to date, provide for taxation of the mere holding of cryptocurrencies. Thus, where cryptocurrencies are simply held during a year, without any exchange being made, form 2086 is in principle not to be completed. The same applies in the case of mere exchanges between cryptocurrencies (for persons subject to the occasional-investor regime).

Where taxable exchanges have been made, form 2086, the main form, is in principle to be completed; other forms may also be relevant:

The tax authorities need several items of information to calculate the amount of tax due. To declare your digital assets, the following 3 forms are in principle to be completed, depending on your situation:

• the main form, which is therefore the 2086: several items of information are required: disposal dates, acquisition prices, disposal prices, exchange fees, etc.;
• form 2042-C: the capital gain or loss realised on your disposals of digital assets is in principle entered in boxes 3AN or 3BN of this form;
• form 3916-bis: if you hold one or more accounts on one or more platforms established abroad

The tax authorities use the information you provide through these forms to calculate the amount of tax due and to know which exchanges you use.

Form 2086 is the most complex to complete. A tax audit remains possible afterwards: it may therefore be useful to be able to justify precisely each of the figures you have entered on this form.

A flat-rate tax of 31.4% (30% for gains realised before 2025)

Depending on the results of the investments made, the taxpayer is in principle taxed on the gains realised during the previous year.

The tax is in principle equal to 31.4% of the net gain realised (30% for gains realised before 2025), unless the progressive scale is opted for.

Example: disposal for €1,000,000 of 1,000 ETH bought for €300,000. The net gain is €700,000. The tax is in principle €219,800 at the rate of 31.4% (€210,000 at the 30% rate applicable before 2025).

What do you risk if you do not declare your cryptocurrencies?

Declaring income and cryptocurrencies is both tedious and time-consuming, but it nonetheless remains, in principle, a legal obligation. Failure to declare exposes the taxpayer to a tax reassessment, where applicable with penalties such as surcharges, fines and, in the most extreme cases, even imprisonment.

For each undeclared account, the fine provided for is in principle 750 euros (1,500 euros if the value of the accounts exceeds 50,000 euros). Each omission or error may also expose you to a penalty of 125 euros (250 euros above the same threshold), although the tax authorities currently recognise a right to make mistakes. The most serious cases (very rare in practice) may expose you to heavy criminal penalties, of up to 3 million euros in fines and 7 years' imprisonment.

The obligation to declare income and cryptocurrencies therefore deserves to be treated with the utmost rigour. The transactions to be declared cover a whole year: the full transaction history is therefore in principle needed.

Key deadlines for declaring cryptocurrencies

The gains of a year are in principle declared in the spring of the following year, with the income tax return (online from April). For online returns, the deadline depends on your département of residence and runs from late May to early June; the exact calendar is published every year on impots.gouv.fr.

Declaration obligations: which cryptocurrency transactions are concerned?

French regulations applicable to individuals provide for the taxation of the following categories of transactions on crypto-assets:

• The sale of cryptocurrencies exchanged for government-issued currencies such as the euro or the dollar, or any other government-issued currency;
• The use of cryptocurrencies to acquire goods or services;
• Gains arising from cryptocurrency mining;
• Income arising from centralised or decentralised finance, the taxation of which is still unclear (lending, masternodes, farming, staking…).

The applicable tax rules therefore remain complex and unclear in many respects. On top of this legal complexity comes the complexity of each taxpayer's practical situation, which is always unique and very often full of pitfalls.

If the stakes are significant for you, the assistance of a tax lawyer seems advisable.

Tax Regime for Cryptocurrencies: Important Clarifications

The tax regime for digital assets, applicable since 2019, was introduced by Article 41 of Law 2018-1317 of 28 December 2018. It takes the form of a flat-rate tax on gains realised by individuals on an occasional basis in connection with disposals of digital assets (bitcoins and other cryptocurrencies).

This tax regime, provided for in Article 150 VH bis of the French General Tax Code (CGI), applies to disposals made on or after 1 January 2019. Thus, gains generated in 2019 had to be declared in 2020. As filing these declarations is relatively complex, the assistance of a tax lawyer may seem advisable, particularly if the stakes are high.

The tax rules remain vague on several points concerning the terms of taxation and reporting obligations. As a tax lawyer, I can shed light on these matters and assist you with declaring your digital assets.

Who Can Be Taxed?

According to Article 150 VH bis of the French General Tax Code (CGI), the tax regime for occasional disposals of digital assets applies to capital gains generated by transactions carried out by individuals directly or through an intermediary.

The tax authorities have stated that taxation is established at the level of the tax household. All disposals made by the taxpayer, their spouse or civil partner (Pacs), their children and the other persons attached to the tax household are therefore in principle taken into account.

The only real consequence of this taxation by tax household is that, if some members of the household have realised gains and others losses, the capital gains and losses are offset against each other.

According to the tax authorities, the intermediary is, broadly speaking, a company or group having its registered office in France. In principle, the intermediary does not carry on a professional activity. This includes, for example, companies or groups engaged in a civil activity such as acquiring or managing a portfolio of digital assets and related rights. These intermediaries are in principle subject to the tax regime for partnerships (sociétés de personnes), whatever the taxpayer's functions and involvement in the company or group.

The tax authorities have indicated that this regime does not concern partnerships with a craft, commercial, industrial, agricultural or non-commercial purpose. Indeed, when this type of company realises capital gains, it is subject to the regime for professional capital gains, whether the disposal of assets is carried out on an occasional basis or more regularly.

The definition of the intermediary is, broadly speaking, comparable to the one used in administrative doctrine for capital gains on securities and company shares.

Which Digital Assets Must Be Declared and May Be Taxed?

The tax authorities adopt the definition set out in Article L 54-10-1 of the French Monetary and Financial Code (Code monétaire et financier) and in Article 150 VH bis of the French General Tax Code (CGI).

These texts specify that the expression "digital assets" covers tokens, except those having the characteristics of financial instruments and cash vouchers (bons de caisse), whose tax regime is the one provided for in Article 200 A of the CGI. Thus, in view of the terms of Article L 552-2 of the Monetary and Financial Code, any intangible asset representing one or more rights in digital form would seem to be considered a token.

Which Transactions May Be Taxed?

This tax regime applies, as a general rule, to disposals for consideration of digital assets or related rights. Note: exchanges between digital assets without a balancing cash payment in principle benefit from a deferral of taxation. A tax lawyer can provide further details on this point.

Article 150 VH bis I of the CGI states that the payment of transaction fees in digital assets to an exchange platform or to members of a network, such as miners, for the transaction to be validated also constitutes a taxable transaction.

The tax authorities have introduced a simplification measure by accepting that the provision of services relating to these fees may be treated globally as one and the same taxable transaction. The taxpayer will then be able to determine a single capital gain or loss for all of these transactions.

Restating the previous administrative rule, the tax authorities specify that the activity of buying and reselling digital assets, carried out on a habitual basis, was taxed as BIC (industrial and commercial profits, bénéfices industriels et commerciaux); since 1 January 2023, it has fallen under BNC (non-commercial profits, bénéfices non commerciaux). The tax authorities provide no further clarification making it possible to distinguish between an occasional investor and a habitual investor.

It is most regrettable that the tax authorities do not provide details in this area. Indeed, it is often difficult to decide between the specific tax regime introduced by Article 150 VH bis of the CGI and the regime for professional profits.

Several regimes therefore overlap today.

Gains arising from a disposal of digital assets may be taxed either:

• as an occasional disposal
• in the category of non-commercial profits (BNC)
• in the category of industrial and commercial profits (BIC)

It should be noted that occasional disposals made by individuals have successively been subject to BNC taxation (administrative doctrine of July 2014), to the regime for capital gains on movable property (Conseil d'État, 26/04/2018) and then, from 01/01/2019, to the regime provided for in Article 150 VH bis of the CGI.

The distinction between occasional and professional would appear to have to be made on the basis of a set of criteria.

The tax authorities state: "The criteria for the habitual or occasional exercise of the activity result from a case-by-case examination of the factual circumstances in which the purchase and resale transactions are carried out (the time between the dates of purchase and resale, the number of digital assets sold, the conditions of their acquisition, etc.)".

What Exemptions Are Provided For?

Article 150 VH bis II-B of the CGI provides for a tax exemption for taxpayers whose total disposal proceeds (excluding exchange transactions benefiting from a tax deferral) during the tax year do not exceed 305 euros.

All taxable disposals, whatever the consideration (money, service, goods), made by the tax household directly or through an intermediary during the tax year are in principle taken into account. Where the disposal is made through an intermediary, the disposal price taken into account corresponds to the share of the partner’s interest in the company.

When total disposals exceed the 305-euro threshold, tax is calculated on all disposals made during the tax year, including those whose amount is below the 305-euro threshold. The corresponding formalities should therefore in principle be completed before the relevant deadline.

How Is the Capital Gain Calculated?

The method for calculating the capital gain or loss is defined by Article 150 VH bis III of the CGI. This amount is equal to the difference between the disposal price and the total acquisition price of the entire digital asset portfolio multiplied by the quotient of the disposal price divided by the total value of the digital asset portfolio.

Capital gain or loss = disposal price – [total acquisition price x disposal price/total portfolio value]

The result of this calculation is expressed in euros. If another currency is involved, the amounts are in principle converted into euros before the calculation, apparently using the exchange rate on the date of each transaction.

The same applies to disposals of digital assets in exchange for goods or services: the market value in euros of those goods or services on the date of the disposal is then, in principle, taken into account.

The Disposal Price

This is in principle the disposal price net of transaction fees.

The Acquisition Price of the Portfolio

The tax authorities specify the rules for determining the acquisition price of the portfolio for disposals made before 1 January 2019, the date on which the new regime came into force. The acquisition price of assets disposed of before 1 January 2019 should in principle not be included in the calculation of the total acquisition price of the portfolio declared from 2019 onwards under the new tax regime.

Deduction is in principle not allowed either for disposals declared under the regime for capital gains on movable property, or not declared because an exemption applied where the disposal price was below 5,000 euros. The same would seem to apply to disposals not declared in breach of the law applicable before 1 January 2019.

As regards transactions prior to 2019, a regularisation may, depending on the case and after analysis with a lawyer, be considered. On this point, the tax authorities have stated that, for any capital gains generated before 1 January 2019, it is the tax authorities’ right of reassessment that applies under ordinary law (in principle 3 years – art. L169 LPF –, extended to 10 years in certain cases, in particular where foreign accounts have not been declared).

Where the taxpayer is unable to provide supporting documents for the acquisition price or value of the digital assets disposed of, their acquisition value is in principle deemed to be zero.

Clarifications on the Overall Value of the Digital Asset Portfolio

The overall value of the portfolio in principle includes all the digital assets held at the time of the disposal.

All storage media are in principle concerned, whether local or foreign exchange platforms, personal servers, offline storage systems (cold storage), or "digital vaults" (hardware wallets, etc.) used to store private keys…

Still with regard to the definition of the overall value of the portfolio, the tax authorities appear to accept that the taxpayer may use valuation tools such as websites publicly recognised as reliable (in principle coinmarket, coingecko…), which provide histories of average daily prices from the main exchange platforms.

Cryptocurrencies: How to Regularise Your Situation in the Event of Non-Declaration?

Following the creation of the new tax regime for cryptocurrencies, the taxpayers concerned have in principle been required, since 2020, to declare their cryptocurrencies: gains and foreign accounts. However, because of imprecise information on certain points and the difficulties encountered in completing the formalities, some taxpayers have not made the necessary declarations, which is of course regrettable.

The first step is then to determine whether the taxpayer is an occasional investor or a habitual investor. This makes it possible to determine the method of taxation: for the former, the 31.4% flat-rate levy regime in principle applies (30% for capital gains realised before 2025, with the possibility of opting for the progressive scale since 2023), whereas for habitual investors, the BNC (non-commercial profits) regime has applied since 2023 (BIC previously). As the boundary between the two statuses – occasional or habitual – is unfortunately still very imprecise, a request for a tax ruling (rescrit) may be submitted so that the tax authorities decide which regime applies. This ruling request is not, however, anonymous.

As mentioned, many grey areas remain to be clarified.

Nevertheless, and despite a certain degree of legal uncertainty, it is important to note that the tax authorities have begun to launch their first tax audits concerning cryptocurrencies.

These audits, very sporadic in 2021, are tending to increase. Officials of the Ministry of Finance and the Economy appear to have stepped up their action since mid-2022, targeting taxpayers who fail to meet – or improperly meet - their tax obligations in respect of cryptocurrencies. Under the DAC 8 directive, the platforms subject to it have been collecting their customers’ data since 1 January 2026 in order to pass it on to the tax authorities; what this could change is set out in the article crypto-assets and DAC 8: letters from the tax authorities as early as the end of 2027?

In this context, voluntary regularisation in principle remains available (except in cases of flagrant bad faith), ahead of any tax audit; depending on the case and after analysis with a lawyer, it may be a solution.

The Right to Make Mistakes

Introduced by the ESSOC Law (État au Service d'une Société de Confiance – a State serving a society of trust) in 2018, the right to make mistakes (droit à l'erreur) is a tax provision that, as a general rule, allows taxpayers to correct an omission or error in their declarations while benefiting from a reduction in late-payment interest.

Note: the right to make a mistake does not, in principle, apply to persons who have deliberately evaded tax.

Practical Answers to the Most Frequently Asked Questions on the Taxation of Cryptocurrencies

How Do I Declare Income Generated by Cryptocurrency Exchanges If I Am a Private Individual?

A French taxpayer regarded as a private individual is in principle subject to two reporting obligations. Where they have opened accounts on cryptocurrency platforms abroad, they are in principle required to complete form no. 3916-3916-bis.

Next, in the event of a taxable disposal, they are in principle required to complete form no. 2086, the schedule to the annual return of gains on digital assets, which states in particular the acquisition price, the disposal price and the overall value of the portfolio for each disposal made.

Finally, the total amount of gains or losses is in principle carried over to boxes 3AN (gains) or 3BN (losses) of return no. 2042 C.

Can Cryptocurrency Losses Be Offset Against Gains Generated in Subsequent Years?

Losses recorded during a year are in principle not carried forward: they are regarded as lost for tax purposes. Thus, in the case of a loss of €400,000 in 2019 and gains of €1,200,000 in 2020, tax is in principle calculated on the basis of €1,200,000, not €800,000 (€1,200,000 – €400,000).

Cryptocurrency Declarations: What Are the Most Common Errors?

In general, taxpayers who make errors have not declared all the accounts they have created. They often forget to include the exchange platforms that allow cryptocurrencies to be purchased.

It is also useful to gather all the information on the trading platforms that make it possible to exchange cryptocurrencies for assets kept in storage wallets. This information is used to value the portfolio after each taxable disposal; it is obtained by monitoring the portfolio regularly.

Taxpayers who only take into account the transactions carried out during the year also make a mistake. For example, if a Bitcoin bought several years ago is resold this year, the acquisition price and the other financial information from previous years are in principle needed.

If the Tax Authorities Carry Out an Audit After the Income Tax Return Has Been Filed: What Can Be Done?

In the event of a tax audit, you may need to explain all the figures entered in the declaration (form no. 2086). Keeping your documents, the various supporting documents and your trade histories well organised can therefore be very useful.

The tax authorities may ask you to explain very precisely the origin of the figures presented and the calculation methods applied. They may also ask you to explain how the composition of the crypto-asset portfolio has been tracked over the years. Sending only the file containing the raw trade history may not be sufficient. It is generally useful to accompany this document with precise explanations that the tax authorities can use. If you do not provide sufficient supporting documents when responding to the tax authorities' requests for explanations, you could be exposed to reassessments.

Must an account on a foreign platform be declared if I have sold nothing?

In principle, yes: every digital asset account opened, held, used or closed with a platform established abroad must be declared every year on form 3916-bis, whatever the amounts and even without any disposal. One declaration per platform is in principle enough, not one per cryptocurrency; for a platform that handles both crypto-assets and ordinary currency, filing both a 3916 and a 3916-bis may be a reasonable precaution.

Are exchanges of one cryptocurrency for another taxable?

In principle, no, for a private individual who invests occasionally: only disposals for legal tender (euro, dollar…) or for goods or services are taxable. These exchanges would, however, count, together with the other transactions, when assessing whether the activity has become habitual, in which case the gains fall under non-commercial profits (BNC). An amendment to the 2027 budget bill, adopted by French MPs on 16 October 2026 but not final at that date, would however make exchanges for currency-backed stablecoins taxable from 2027 (see exchanging crypto for stablecoins: taxable from 2027?).

Does the €305 threshold apply to the capital gain?

In principle, no: it refers to the total disposal prices for the year, not the gain. If this total exceeds €305, all disposals in the year are taxable, including the smallest ones.

How are the platform’s fees taken into account?

On purchase, the acquisition price is in principle the amount actually paid, commission included. On sale, disposal costs are, as a general rule, deducted from the disposal price. In both cases, the taxable gain is reduced accordingly.

Are mining gains taxed as capital gains?

In principle, no. Mining income falls under non-commercial profits (BNC), under the micro regime or, by option, the controlled-return regime, and not under the private individuals’ capital gains regime.

Read more

• Exchanging crypto for stablecoins: taxable from 2027?
• Crypto-assets and DAC 8: letters from the tax authorities as early as the end of 2027?
• Cryptocurrency Taxation (Made Easy) in Questions and Answers
• Crypto Taxes: Individual or Professional, Where Is the Line?
• Declaring Foreign Cryptocurrency Accounts in France
• Crypto-Asset Taxation: What DAC8 and the Travel Rule Change
• Differential Contribution on High Incomes (CDHR) and Cryptocurrencies