France’s Finance Minister says the government will not impose taxes on the gains from crypto-to-crypto trading unless converted to fiat currencies. This move appears to be part of the plan by French authorities to track virtual currency transactions.
Meanwhile, the Finance Minister says the country’s government will make efforts to stop Facebook’s Libra cryptocurrency from operating in Europe. Regulators in Switzerland are, however, calling for international cooperation in creating a governing structure for the proposed digital currency.
Tax Exemption for Crypto Trading
According to Bloomberg Tax, Bruno Le Maire, the French Minister of Finance has declared that there will be no taxes on the gains accrued from crypto-to-crypto trades. Taxes will only be levied when traders convert their crypto earnings into fiat cash.
An excerpt from Le Maire’s statement reads:
“We believe that the moment the gains are converted into traditional money is the right time to assess tax.”
Reports indicate that France is already implementing the new cryptocurrency taxation framework and may propose the same to the European Union (EU). It is believed that such an approach will help in the monitoring and tracking of virtual currency transactions.
French authorities have in recent times moved towards levying significant taxes on digital technology, especially those domiciled in the United States. As reported by Blockonomi, the country is planning to impose a 5% tax on tech behemoths like Facebook and Google.
Meanwhile, the country continues to lobby the EU into creating a clear-cut set of rules for cryptocurrencies in the region.
America is Losing the Crypto Race
France’s new crypto tax regime is coming on the heels of Iran proposing a tax holiday for bitcoin miners in the country. As reported by Blockonomi, authorities in Iran say miners who repatriate their overseas earnings will be in line for tax exemptions.
For crypto legal expert, Jake Chervinsky, these developments in the face of lack of similar progress in the United States points to the expanding gulf between the rest of the developed world and the U.S. in the emerging digital economy.
France eliminates taxes for crypto-to-crypto trades. Iran does too, for miners repatriating revenue. USA? IRS demand letters.
China builds its own digital currency. Many more follow, like the Marshall Islands. USA? FedNow, due in 2023.
This is a competition, and we're losing.
— Jake Chervinsky (@jchervinsky) September 12, 2019
While countries like Portugal have created a blanket tax exemption for cryptos while the Internal Revenue Service (IRS) is the U.S. is proposing more stringent tax compliance laws.
Tweeting on Thursday, Chervinsky stated that the U.S. is losing the competition as other countries take significant steps in strengthening their positions in the international cryptocurrency scene.
France Won’t Allow Libra Operate in Europe
Speaking on Thursday (September 12, 2019), Le Maire also stated that France will prevent Libra’s launch in Europe. For the French Finance Minister, Facebook’s cryptocurrency project constitutes a grave danger to the Euro’s sovereignty.
Le Maire’s comments are the latest in a long list of opposition and criticism of the Libra cryptocurrency project. China’s central bank is reportedly accelerating its plans to launch a digital yuan currency in response to Libra.
Meanwhile, Switzerland’s Financial Market Supervisory Authority (FINMA) is of the opinion that regulators across the globe should work together in creating a governing framework for Libra.
According to FINMA head Mark Branson:
“A project of such a global dimension can be addressed only via international coordination and consultation with other supervisors and regulators. It is illusory to believe a single country can regulate and oversee a project like Libra on its own.”
The Libra Association recently applied for a payment license in Switzerland as it looks set to begin the preparation of all modalities necessary for the launch of the project. Swiss authorities say Libra will not be getting a free pass from its regulatory bodies.