France's Proposed Crypto Tax is “Economically Unjust”: Specialists – Decrypt

France’s Nationwide Meeting has adopted a controversial wealth tax modification that, for the primary time, explicitly targets cryptocurrency holdings, triggering criticism from business consultants who warn the measure may penalize innovation and drive expertise overseas.

Modification No. I-3379 to France’s 2026 Finance Invoice, handed by a slim 163-150 vote final Friday, provides digital belongings beneath Article L.54-10-1 of France’s Financial and Monetary Code to a brand new “unproductive wealth” tax base alongside gold, yachts, and traditional vehicles.

The measure, launched by centrist MP Jean-Paul Mattei of the Les Démocrates group, imposes a flat 1% annual tax on web wealth exceeding $2.2 million (€2 million), up from the earlier $1.49 million (€1.3 million) threshold.

Whereas the invoice goals to encourage productive funding by exempting sure long-term rental properties, crypto receives no such carve-out.

The modification doesn’t distinguish classes of crypto holders and fails to exempt tokens obtained by means of enterprise exercise, workforce vesting, or community incentive packages.

Trade consultants say the shortage of nuanced definitions has sophisticated the tax remedy for crypto founders and builders.

Joe David, CEO and Founder at Nephos, knowledgeable providers agency for the digital asset business, informed Decrypt the invoice “dangers oversimplifying” the crypto panorama by failing to tell apart between passive buyers and ecosystem builders whose tokens symbolize “years of contribution, innovation, and danger taking.”

He warned the measure may “inadvertently penalize productive capital” driving technological progress in France’s digital economic system and does not align with “world requirements” on crypto taxation.

The newest proposal would upend its 30% sale-only crypto tax, changing it with an annual wealth levy on holdings—taxing cash “whether or not or not they’re offered.”

Burçak Ünsal, Managing Accomplice at ÜNSAL Attorneys at Legislation, informed Decrypt the modification fails to carve out token issuers and founders who maintain belongings as a part of their operational position.

Taxing early token-holders may very well be “economically unjust,” he famous, when their position is ecosystem-building, creating an “unintended disincentive” for long-term alignment.

Ünsal warned that with out clear definitions distinguishing skilled from occasional merchants, there stays “tax-structuring danger” for token-based enterprise fashions.

The invoice lacks clear definitions distinguishing occasional from skilled merchants, Ünsal mentioned, noting that the excellence “can be decided on a case-by-case foundation” contemplating “quantity, frequency, and proportion of crypto revenue.” He warned that till “implementing decrees or steerage” make clear the principles, a “tax-structuring danger” stays for token-based companies.

Austin Yuanlun Yin, US-licensed CPA and President of the International Council on Crypto Taxation, informed Decrypt the reform “dangers punishing innovation” and that taxing crypto closely “will speed up capital flight” since buyers can transfer digital belongings throughout borders in minutes.

“By lumping digital belongings like Bitcoin with yachts and artwork beneath a ‘tax on unproductive wealth,’ France is sending a message that capital held in crypto is idle somewhat than dynamic. That’s inaccurate and shortsighted,” Yin mentioned.

As a substitute of taxing crypto holdings as ‘unproductive,’ policymakers ought to “acknowledge their position in funding startups, decentralized infrastructure, and digital innovation,” he added.

The invoice now heads to the Senate earlier than a second studying within the Nationwide Meeting. Lawmakers have 70 days to finish deliberations, with closing adoption required by December 31, 2025.