The Legislative Victory of the Nouveau Front Populaire (NFP) and Its Impact on Cryptocurrency Taxation

The legislative victory of the Nouveau Front Populaire (NFP) has brought economic uncertainty, especially in terms of cryptocurrency taxation. The NFP program aims to abolish the 30% Flat Tax on capital gains and replace it with income tax, which would heavily impact large capital gains. This move has sparked debates as the number of cryptocurrency investors surpasses those in stocks.

The NFP’s fiscal program includes increasing the progressivity of income tax to 14 brackets, making the CSG progressive, reinstating a strengthened solidarity tax on wealth (ISF) with a climate component, abolishing the flat tax, and reinstating the exit tax. These changes would have significant implications for cryptocurrency investors.

The abolition of the Flat Tax in favor of income taxation would lead to a reduction in taxes on small capital gains and low incomes, while increasing taxes on large capital gains and high incomes. Additionally, cryptocurrencies would be included in the calculation of the wealth tax, potentially resulting in double taxation with the ISF.

Calculations by the Institut Montaigne suggest that abolishing the Flat Tax would actually lead to a loss in tax revenue for the State. This could have adverse effects on public finances, especially in a context of increased deficit.

Furthermore, the current taxation system in France treats cryptocurrencies as movable assets subject to a 30% flat tax. However, the number of people declaring cryptocurrency gains is significantly lower than the number of cryptocurrency account holders, leading to a potential shortfall for the State.

In conclusion, the NFP’s victory could bring about significant changes in cryptocurrency taxation, impacting both investors and the State’s revenue. The debate around capital gains taxation is expected to intensify in the coming months, given the growing popularity of cryptocurrencies among investors.