White Paper: Taxation of cryptocurrencies for individuals

In collaboration with Waltio, the tool for assisting with the tax declaration of capital gains on digital assets, Alexandre Lourimi publishes a white paper presenting the taxation of cryptocurrencies for private individuals. The latter sets out and explains the main features of the new tax regime that will come into force on 1 January 2019.

The White Paper presents :

• Firstly, the methods for determining the applicable regime. Is the activity exercised as a profession? On a regular basis? When is the activity to be considered habitual? What criteria should be taken into account to qualify an activity as professional (frequency, amount of transactions, trading tools, etc.)?

• Secondly, the methods for calculating taxable capital gains. How to determine the overall value of the portfolio? What is the total acquisition price? What are fractions of initial capital? How to deal with transaction fees? How to calculate the amount of the capital gain on cryptos to be declared each year to the tax authorities?

• Thirdly, the declaration procedures. How to fill in Form 3916 bis and Annex 2086? Which accounts opened with digital asset exchange platforms must be declared (centralised exchanges? decentralised exchanges? bank card providers such as Crypto.com, Wirex, Monolith? custodial wallets? non-custodial wallets?)? Should accounts on which identity has never been disclosed be declared? Those to which no crypto has been transferred?

• Finally, good practices to be ready in the event of a tax audit: how to analyse one’s own situation in order to defend it before the tax authorities? what documents to keep? how to demonstrate good faith?

In addition, Alexandre Lourimi has published a fact sheet for LexisNexis to present in more detail the taxation of cryptocurrencies for individuals.