France’s National Assembly Finance Committee has approved two amendments that would reshape the tax treatment of digital assets. The proposals aim to close perceived gaps in the current framework by taxing stable-coin conversions and extending the existing exit-tax regime to cryptocurrency holdings.
Tax on stable-coin conversions
The first amendment, introduced by a left-wing parliamentarian and supported by 16 co-signers, seeks to classify the exchange of cryptocurrencies for MiCA-compliant stablecoins as a sale for tax purposes starting 1 January 2027. Under the draft, any profit realized from such a swap would be measured against the original acquisition cost and taxed at France’s flat rate, which was adjusted to 31.4% after a 2026 reform.
Proponents argue that the current loophole allows investors to avoid tax when moving from volatile assets to stablecoins, even though those tokens can be used for payments or to acquire other digital assets. By applying the existing flat tax, the amendment does not create a new rate but extends the existing rule to a previously untaxed transaction.
Extension of the exit-tax to crypto
A second amendment would broaden the exit-tax, currently applied to shares, to include cryptocurrency. The levy would affect households whose combined crypto portfolio exceeds €800 000, provided the taxpayer has been a French fiscal resident for at least six of the previous ten years. The rule would take effect from 1 January 2027 and would require departing individuals to disclose the full extent of their digital holdings, whether stored on exchanges, custodial services, or personal wallets.
The measure mirrors the threshold used for equity assets and adopts the same deferral mechanisms, aiming to prevent high-net-worth individuals from sidestepping tax obligations by moving abroad with crypto holdings.
Loss-carry-forward provision
A third amendment, also approved by the committee, would permit crypto investors to carry forward net losses for a decade, similar to the treatment of stock losses. This change would allow taxpayers to offset future gains with past deficits, addressing the current inability to roll over unused crypto losses.
Legislative outlook
Although the committee voted in favor of these amendments, they are not yet law. The broader budget’s revenue section was rejected by a wide margin, meaning the full Assembly will consider the original government text beginning 13 October, with a decisive vote scheduled for 20 October. Should the proposals survive the subsequent debates, the new tax rules would be implemented from the start of 2027.
Why it matters
France’s effort to integrate stablecoins and crypto into its tax system reflects a growing trend among European nations to align digital asset regulation with broader financial legislation, such as the MiCA framework. By targeting both conversion events and cross-border relocations, the measures could set a precedent for other jurisdictions seeking to ensure equitable tax treatment of emerging crypto activities. The loss-carry-forward provision also signals a move toward greater parity between digital and traditional assets, potentially influencing investor behavior and compliance strategies across the EU.
