French lawmakers are planning to cut the capital gain tax on cryptocurrencies. The lawmakers have amended the 2019 budget bill which will reduce the capital gain tax on cryptocurrencies sales from 36.2 per cent to 30 per cent. In France, other non-real assets are also taxed at a flat rate of 30%. The amendment will bring crypto transactions in line with other non-real estate assets.
According to a report, the finance commission of lower house of parliament has adopted the budget bill amendment. But in order to become a law, it must be approved in the final version of the bill by the broader parliament. If the bill approved in the broader parliament the new tax will come into force from January 2019.
At one point in time, the cryptocurrency capital gain tax reached 45% in the third largest economy in Europe. In April this year, the Council of State said that the gains generated from cryptocurrencies should be treated as capital gain on movable properties. And this led a significant slash in the tax rate of digital assets. The step taken by the French regulators perceived very positively by the blockchain and cryptocurrency ecosystem.
France is trying to become the heaven for the crypto industry in hope to attract foreign investment. Currently, blockchain technology and cryptocurrencies represent a new vibrant industry in France. The President of France, Emmanuel Macron launched the Action Plan for Business Growth and Transformation (PACTE) earlier this year. The new action plan will make it easy to operate blockchain and crypto companies in France. In September, France government also laid out legal guidelines for fundraising via Initial coin Offerings (ICOs) or token sale. The finance minister Bruno Le Maire said that the new legal framework enables the financial regulators Authorité des Marchés Financiers (AMF) to approve and issue the permits to the businesses which are planning to float initial coin offering in France. The issuers of ICOs have to give full disclosure to the AMF so that the buyers of tokens can make an informed decision about investing in ICO. Earlier the French regulators were concerned about the lack of clear regulations on ICO projects as there are some risks associated with ICOs such as terrorist financing, money laundering, and the possibility of lose money.