The cryptocurrency space is often criticised by governments of the world, different countries are imposing different restrictions of cryptocurrencies and it’s trading, while there are some countries who realise the potential of blockchain and welcoming crypto wholeheartedly. Recently the tax authority of Portugal also declared that they will not tax both crypto payments and cryptocurrency trading in the country, following this France also declared tax free crypto-crypto trading.
Economy Minister of France, Bruno Le Marie made an announcement on September 12 and he said that the French government will not imply tax on crypto-to-crypto transactions and trades, on the other hand, they will imply tax on trade between virtual currencies and traditional currency.
As the per report, Le Marie’s stated,
“We believe that the moment the gains are converted into traditional money is the right time to assess tax.”
He further added,
“By the same logic, value-added tax will only be assessed when a cryptocurrency asset is used to acquire an asset or a service.”
This move is taken by the French authorities to decrease their problems of recording the transactions of crypto-to-crypto for taxing purposes. This new service is already in the process as the reports started and it will surely work in the interest of crypto investors and merchants of France. The value-added tax is only applied to cryptocurrency when a trader will buy will any service or assets.
On the other hand, he opposed the cryptocurrency of Facebook, Libra and he said that France’s step to virtual currency taxation will assist them with the tracking of transactions made by traders. The taxation system of the United States stays exactly opposite of France’s new system of tax-free crypto-to-crypto transactions. Even recently, the IRS has sent letters to inform the cryptocurrencies traders to pay their taxes.