A recent report highlights that only 150,000 of the estimated 5 million French cryptocurrency holders have properly declared their assets, prompting government action. According to Clubic, a French IT magazine, the Ministry of Public Action and Accounts, alongside other national tax authorities, are gearing up to address this significant discrepancy in asset declaration.
The European Central Bank estimates suggest that approximately 5 million people in France own cryptocurrencies, including Bitcoin. However, tax officials believe that there is widespread under-reporting of these assets among the populace.
In response, the French government is in the process of introducing stringent new legislation aimed at enforcing compliance among crypto holders. The proposed law, being developed with the cooperation of the Economy Ministry, is expected to introduce a comprehensive suite of anti-fraud measures to compel proper declaration of crypto assets.
Officials have indicated that the new rules, which are part of a broader anti-fraud legislative package, could come as an unwelcome surprise for the country’s crypto enthusiasts. The legislation is set to be discussed soon by lawmakers and could be enacted by the end of fall 2024 if it passes through parliament without significant opposition.
Under the new regulations, failing to declare cryptocurrency holdings could lead to severe penalties. Fines for non-declaration can amount to 40% of the undeclared assets’ total value, with penalties for professional traders doubling to 80%.
Additionally, the Ministry of Public Accounts is seeking to extend the tax authority’s power to oversee French citizens’ foreign-held assets and holdings. This move is aimed at curtailing attempts to conceal crypto assets in overseas wallets and exchange platforms.
This tightening of regulations comes amidst a backdrop of increasing cryptocurrency adoption in France, particularly among the younger demographic. Reports indicate that 15% of French individuals aged 18-24 have engaged in cryptocurrency purchases, with 9% of the overall population having bought crypto at some point.
The proposed changes are set against recent fluctuations in Bitcoin prices against the euro, underscoring the volatile nature of the crypto market.