2024 Cryptocurrency Tax Return Guide

With the 2023 tax season now open, here’s a survival guide on how to declare your cryptocurrency capital gains for tax. What dates to remember? What are your tax obligations? What are the risks of non-declaration? What’s new in 2024?

This article is brought to you in commercial collaboration with Walt (learn more)

This guide is brought to you by Waltio Tax Assistant and is intended for individuals who invest occasionally and does not address taxation applicable to professional traders. The quality rating of a casual or regular trader depends on the frequency, tools, amounts invested and profits achieved.

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Tax calendar dates to remember

The first important thing you should know when declaring your cryptocurrencies on time and not have sanctions, it’s a date.

The deadlines for filing your tax return vary depending on where you live. If the online declaration service opens to all on April 11, 2024, the dates vary by department.

Here are the tax calendar dates for income tax returns for 2023 :

  • April 11, 2024 : opening of the online declaration service on the impots.gouv.fr website;
  • May 20, 2024 : deadline for submitting a tax return, in paper form;
  • May 23, 2024 : deadline for online declaration of income in zone 1 (departments 01 to 19 and foreign residents);
  • May 30, 2024 : deadline for online declaration of income in zone 2 (wards 20 to 54);
  • June 6, 2024 : deadline for online declaration of income in zone 3 (wards 55 to 976).

💡 Find our opinion and complete instructions from tax assistant Waltio

What are your tax obligations when it comes to cryptocurrencies?

If you hold cryptocurrencies, the French tax regime imposes 2 obligations :

  1. Declaration of taxable cryptocurrency transactions: if you have sold crypto-currencies into a legal tender currency, euro, dollar, etc., and purchased goods and services with crypto-currency;
  2. Declaration of accounts opened on platforms based abroad.

Obligation to declare your taxable benefits

Each year, the tax system requires you to report your taxable supplies. This declaration must be made when submitting the tax return, using additional form No. 2086 specific to cryptocurrency transfers.

Here is the formula used to determine the taxable capital gain on your capital gain:

If you have made a large number of taxable transactions, retrieving all your transactions becomes very tedious and the risk of errors is even greater.

help you tax assistant Waltio automatically collects all this information, which offers significant time savings for your statement. Waltio will then provide you with a tax return and guide you step by step to complete your return.

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The obligation to report your digital asset accounts

In addition to the declaration of taxable supplies you are required to declare your “digital asset accounts” opened, held, used or closed during the year with companies based outside of France. This applies to all exchange platforms that hold cryptocurrencies and are domiciled abroad.

This declaration is made through the combined form No. 3916 – 3916bis. You will need to provide a certain amount of information about the platform (name, address, etc.) and the characteristics of said account (private or professional use, single account or joint account).

Please note that Waltio will also help you complete as many Forms 3916bis as needed by combining all the information from the centralized declaration platforms.

Note that you do not need to enter the amounts held in your accounts. Also, it is not necessary to declare so-called “non-custodial” wallets such as Ledger or Trezorbecause you are the sole owner of the cryptocurrencies they store.

👉 Discover our complete guide to declaring your capital gains in cryptocurrencies

What are the risks of non-declaration?

A lack of omission or error in the reporting of your foreign accounts or your taxable transactions can have significant consequences, either at the tax or even criminal level.

To undeclared accounts

For undeclared accounts of digital assets, the law applies (Art. 1736 If the value of your account exceeds EUR 50,000 during the year, the fine can reach up to EUR 1,500 and EUR 250.

In addition, there may be an increase in the amounts you owe to the tax authorities, known as a “tax adjustment”.

For an error in the tax return

In case of under-declaration or late declaration of your cryptocurrency capital gains, the increase is 10%, in case of intentional failure 40%.AND 80% in case of fraudulent maneuvers or abuse of rights. Within the next 30 days, it is possible to correct your return to avoid a tax adjustment.

However, in the case of tax fraud, criminal sanctions can be applied, such as a fine of up to 3 million euros, as well as a prison sentence of up to 7 years for fraud with aggravating circumstances (Article 1741 CGI).

👉 Are you looking for a lawyer for a delicate situation? Here is a list of lawyers specializing in cryptocurrency and blockchain

The right to be wrong

It is important to note that the ESSOC Act 2018 established the right to make mistakes in tax matters. This right allows you to correct your situation without paying a penalty in the event of an error or omission in your tax return.. The situation can be rectified at any time, but late payment interest can be applied without an increase or penalty.

It is possible to report an error or oversight to the tax administration by submitting a corrected tax return.. To do this, simply log into your individual area and use the online correction service, which is available from August to mid-December of the year in which the return is to be corrected.

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What income and operations should you consider?

Calculating capital gains on digital assets is complex and time-consumingit requires knowing exactly the total value of your portfolio (the whole sums of all your accounts) at the time you make the transfer.

Additionally, cryptocurrency earnings from other sources such as NFTs, Play-to-Earn games, staking, lending, airdrops or even mining should be considered and included in your total wallet value.

You’ll understand, just tear your hair out or be desperate in the face of the magnitude of the task…

don’t panic tax return assistance tool Walt it allows you, regardless of your profile, to take into account all your operations by connecting your accounts via API and supporting more than 200 platforms and complex operations. Waltio will provide you with tax documents to help you meet your tax obligations.

👉 Also find the Waltio white paper to learn all about cryptocurrency taxation in 2024

Tax developments affecting cryptocurrencies in 2024

Tax option on the progressive tax scale for individuals

If you are a natural person, you will have the option to ignore the 30% flat tax as part of your tax return. You can opt for a progressive income tax scale to tax your cryptocurrency generated profits.. It will then be necessary to determine what will be most beneficial for you, based on your fixed income.

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This option only applies to taxable transactions made from January 1, 2023.

Revision of the tax regime applicable to professional actors

Before January 1, 2024, the applicable taxation fell under the BIC (Industrial and Commercial Profits) regime for operations carried out on a professional basis.

From January 1, 2024, something new is needed: professionals must now declare their income in the area of ​​BNC (non-commercial profits).

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