The idea is to boost cryptocurrency transactions in the country. But this decision does not apply to the payment of Value-Added Tax (VAT), in the case of companies
Following the steps that Portugal took 15 days ago, the French Economy Minister Bruno Le Maire, who is a cryptoactive enthusiast, said that taxes will not be applied to transactions conducted with cryptocurrencies in his nation. It only will apply if the digital currencies come or derive from profits in fiat money.
This decision is similar to the one announced at the end of August by the Portuguese government. The tax authority of that country published an official document in which it explained that cryptocurrencies are seen in that territory as a means of payment and for that reason they are exempt from taxes, in case they do not later become traditional currencies.
The objective is to facilitate and encourage cryptocurrency transactions in the country. This means that as long as the citizens of that country buy or exchange any type of cryptocurrency they will be free of taxes.
What Happens in the Case of Companies?
However, in local media, it was clarified that these types of operations do not apply to the payment of Value-Added Tax (VAT).
These details were explained by the tax agency to clarify doubts associated with the operations of a local company dedicated to mining digital currencies, in this case, cryptocurrencies such as Bitcoin, among others.
According to Bloomberg Tax, the French approach would help with the tracking of transactions, which represents a challenge in the world of cryptocurrencies.
“We believe that the moment the gains are converted into traditional money is the right time to assess tax”, said Le Maire.
In this way, cryptocurrency users should only follow the correct use of cryptocurrencies to avoid VAT in both the purchase and sale processes.
France and Portugal are not the only countries that are working on issues related to cryptocurrency operations and legislation.
Last August, New Zealand opened its doors and gave cryptocurrencies greater opportunities. In that sense, it allowed income, salary payments and tax provisions in cryptocurrencies.
Also, the decision of that regulatory body suggested that only stablecoins could be used as a means of payment because their value is less volatile than the price of other cryptocurrencies such as Bitcoin.
Similarly, Brazil decreed, at the beginning of last month, specifically on August 2th, those who conduct transactions with cryptocurrencies should declare these operations to the Department of Federal Revenue, in a digital currency market that has a greater number of investors than the Stock Exchange of Sao Paulo.
The community of cryptocurrency users in France has expressed its agreement with the measure.
Le Maire played an important role in the design of the French regulatory framework for cryptocurrencies. For this reason, the official invites other countries of the European Union to follow the steps that his nation has taken, whilst it continues the study of these digital assets to make them part of its financial system in the best possible way.
However, although Le Maire’s policy has been to support Bitcoin, some French ministers decided not to accept Libra, the cryptocurrency of Facebook, for being “a risk to the sovereignty of the government”, since they say it can be used to finance terrorism and money laundering.
By María Rodríguez