The victory of the Nouveau Front Populaire （NFP） could lead to significant changes in cryptocurrency taxation. This article explores the potential impact on the flat tax and other related fiscal policies proposed by the NFP.
Points
- Abolition of the 30% Flat Tax: The NFP proposes to abolish the prélèvement forfaitaire unique （PFU）, impacting capital gains on digital assets.
- Progressive Income Tax: Cryptocurrency gains would be taxed as labor income, following the 14 established tax brackets.
- Wealth Tax Inclusion: Cryptocurrencies would be included in the calculation of the wealth tax （ISF）.
- Potential Revenue Loss: Abolishing the Flat Tax could lead to a significant loss of tax revenue for the state.
The victory of the Nouveau Front Populaire （NFP） could lead to a significant revision of cryptocurrency taxation. Specifically, the NFP proposes to abolish the 30% prélèvement forfaitaire unique （PFU）. The introduction of the PFU in 2018 was notably a step towards simplifying the tax regime applicable to capital gains on digital assets. All capital gains on cryptocurrencies have thus far been taxed at the rate of 30%. But the NFP intends to tax these gains as labor income, following the 14 established tax brackets.
The Nouveau Front Populaire’s fiscal program mainly consists of the following points:
- « Increase the progressivity of income tax to 14 brackets
- Make the CSG progressive
- Reinstate a strengthened solidarity tax on wealth （ISF） with a climate component
- **Abolish
the 30% prélèvement forfaitaire unique （PFU）**, which could significantly affect the way cryptocurrencies are taxed.
Progressive Income Tax
Under the NFP’s proposal, cryptocurrency gains would be taxed as labor income, following a progressive scale. This means that the tax rate would increase with the amount of income, which could lead to higher taxes for individuals with substantial gains. The 14 tax brackets range from 0% to 45%, which contrasts with the flat 30% rate currently applied under the PFU.
Wealth Tax Inclusion
Another significant change proposed by the NFP is the inclusion of cryptocurrencies in the wealth tax calculation. This means that individuals with large holdings in digital assets could see their overall tax liability increase. The wealth tax, or Impôt de Solidarité sur la Fortune （ISF）, was abolished in 2018 and replaced by a tax on real estate assets. The NFP’s plan to reinstate and strengthen this tax could have a considerable impact on wealthy crypto investors.
Potential Revenue Loss
While these changes aim to increase tax equity and revenue, they could also lead to potential revenue losses. The flat tax on capital gains has been a steady source of revenue for the government. Abolishing it in favor of a more complex and potentially higher tax structure could lead to tax avoidance and reduced compliance. Furthermore, the higher tax rates could deter investment in the cryptocurrency sector, which has been growing rapidly in recent years.
Conclusion
The NFP’s proposals mark a significant shift in cryptocurrency taxation policy. By moving away from the flat tax and towards a progressive income tax and reinstating the wealth tax, the NFP aims to increase tax fairness and revenue. However, these changes could also lead to potential revenue losses and impact investment in the cryptocurrency sector.
解説
- Abolition of PFU: The proposed abolition of the flat 30% tax could lead to higher tax rates for many crypto investors, particularly those with significant gains.
- Progressive Taxation: Taxing cryptocurrency gains as labor income under the progressive income tax system could result in a more equitable but complex tax structure.
- Wealth Tax Impact: Including cryptocurrencies in the wealth tax could increase the tax burden on wealthy investors, potentially leading to reduced investment in digital assets.
- Revenue and Compliance: The potential for revenue loss and tax avoidance could challenge the effectiveness of the proposed tax changes, impacting overall compliance and government revenue.