How to Report DeFi Yield in France: A Complete Tax Guide for 2024

Understanding DeFi Yield Reporting Requirements in France

Decentralized Finance (DeFi) has revolutionized earning opportunities through yield farming, staking, and liquidity mining. In France, these crypto-generated returns are taxable income. The French Tax Authority (Direction Générale des Finances Publiques – DGFiP) treats DeFi yields as movable property income (Revenus de Capitaux Mobiliers) under Article 150 VH bis of the General Tax Code. Whether you earn ETH from staking or governance tokens from liquidity pools, you must declare all yields annually on your tax return. Failure to report can trigger audits, penalties up to 80% of owed taxes, and interest charges.

Step-by-Step Guide to Reporting DeFi Yield

1. Track All Yield Transactions: Use blockchain explorers (Etherscan) or tax software (Koinly, CoinTracking) to record dates, amounts, and EUR values at receipt.
2. Calculate Annual Gains: Sum all yields received between January 1–December 31. Convert to EUR using exchange rates at time of receipt.
3. Complete Form 2042 C: Report total yield under “Revenus des capitaux mobiliers” in Box 2TR. Attach Form 2074 for supplementary details if yields exceed €5,000.
4. Apply the 30% Flat Tax: DeFi yields are subject to a prélèvement forfaitaire unique (PFU) – 12.8% income tax + 17.2% social charges.
5. File by Deadline: Submit your declaration via impots.gouv.fr by early June (exact date varies yearly).

Common Reporting Mistakes to Avoid

• Ignoring Small Yields: Even minimal rewards (e.g., under €10) must be declared cumulatively.
• Using Year-End Exchange Rates: Always convert crypto to EUR at the exact time of receipt.
• Overlooking Airdrops & Hard Forks: These are taxable as income at fair market value upon receipt.
• Mixing Personal & DeFi Wallets: Maintain separate wallets to simplify transaction tracking.
• Forgetting Foreign Platform Reporting: French residents must declare yields from international protocols (e.g., Uniswap, Aave).

Essential Tools for Compliance

• Tax Software: Koinly (supports 700+ exchanges), CoinTracking (automated EUR conversions)
• Portfolio Trackers: Zerion, Zapper.fi for real-time yield monitoring
• Regulatory Resources: DGFiP’s crypto tax guide (Bulletin Officiel des Finances Publiques-Impôts BOI-RSA-CM-20)
• Blockchain Analytics: Etherscan for Ethereum-based transactions, BscScan for Binance Smart Chain

Frequently Asked Questions

Is DeFi yield taxed differently than crypto trading profits?

Yes. Trading profits fall under capital gains (calculated upon sale), while DeFi yields are taxed as income upon receipt via the 30% flat tax (PFU).

Do I pay tax if my yields are automatically compounded?

Yes. Each compounding event is considered new income. For example, reinvested staking rewards trigger additional taxable events.

How does France treat yield from stablecoin pools?

Identically to volatile assets. USDC or DAI rewards are converted to EUR at receipt value and taxed at 30%.

Are losses from impermanent loss tax-deductible?

No. Impermanent loss isn’t recognized as a deductible expense under current French tax law.

What if I use a non-KYC DeFi platform?

You remain legally obligated to report. The DGFiP can trace wallets via blockchain analysis. Undeclared income risks penalties of 40–80%.

Can I deduct gas fees from my taxable yield?

No. Transaction fees aren’t deductible for DeFi income reporting, unlike crypto trading expenses which reduce capital gains.