Navigating the tax implications of NFT profits in France can be complex, but proper reporting is essential to avoid penalties. As the French tax authority (Direction Générale des Finances Publiques) increasingly focuses on digital assets, understanding your obligations is crucial. This guide breaks down everything you need to know about declaring NFT earnings under French tax law.
UNDERSTANDING NFT TAXATION IN FRANCE
NFT profits are taxable in France, classified based on your activity level. For occasional sellers, gains typically fall under capital gains tax (plus-values mobilières). Professional traders or creators may qualify as business income (BIC/BNC). The distinction depends on transaction frequency, profit motivation, and organizational structure.
KEY STEPS TO REPORT NFT PROFITS
Follow this process to accurately declare your NFT earnings:
1. Calculate your net gain: Sale price minus purchase cost and allowable expenses
2. Determine your seller status (casual vs. professional)
3. Complete the relevant tax forms
4. Submit declarations by French tax deadlines
5. Pay any owed taxes
CLASSIFYING YOUR NFT ACTIVITY: CASUAL VS PROFESSIONAL
Casual sellers (non-professionnels) enjoy simpler taxation. Your NFT profits are combined with other capital gains and taxed at a flat 30% rate (12.8% income tax + 17.2% social charges). Professional status applies if:
* NFT trading is your primary income source
* You conduct regular, organized transactions
* You maintain business infrastructure
Professionals pay progressive income tax (up to 45%) plus social charges, but can deduct business expenses.
CALCULATING YOUR NFT CAPITAL GAINS
For casual sellers, use this formula:
Net Gain = Sale Price – (Acquisition Cost + Transaction Fees + Creation Costs)
Deductible expenses include:
* Original minting/gas fees
* Marketplace commissions
* Blockchain transaction costs
* Authenticity verification services
French tax law allows a €305 annual deduction for capital gains after applying a 6.8% allowance for holding periods over 2 years.
REPORTING PROCEDURES AND DEADLINES
File NFT profits with your annual income tax return:
* Use Form 2042 C for capital gains (non-professionals)
* Professionals declare via Form 2031 (BIC) or Form 2035 (BNC)
Key deadlines:
* Online filing: Early June (exact date varies annually)
* Paper returns: Mid-May
Tax payments are due when submitting your declaration, with options for installment plans.
SPECIAL RULES FOR NFT CREATORS AND TRADERS
Creators selling original NFTs:
* Initial sales may qualify for artist tax regimes
* Resale royalties treated as miscellaneous income
Professional traders must:
* Register with business authorities (SIRET number)
* Maintain detailed transaction records
* Pay VAT if exceeding €85,000 annual turnover
PENALTIES FOR NON-COMPLIANCE
Failure to properly report NFT income risks:
* 10% late-filing penalty (minimum €150)
* 40% surcharge for unreported income
* 0.2% monthly interest on unpaid taxes
* Criminal charges for severe fraud cases
FREQUENTLY ASKED QUESTIONS
Q: Are NFT losses deductible in France?
A: Yes. Casual sellers can offset losses against capital gains for 10 years. Professionals deduct losses from business income.
Q: How are NFT airdrops and staking rewards taxed?
A: These are considered miscellaneous income at fair market value when received, subject to income tax and social charges.
Q: Do I pay tax on NFTs transferred between my own wallets?
A: No. Transfers without value change aren’t taxable events. Only actual sales trigger tax liability.
Q: What records must I keep?
A: Maintain for 6 years: transaction IDs, wallet addresses, acquisition/sale dates, counterparty details, and expense receipts.
Q: How does France tax NFT sales by non-residents?
A: Non-residents pay 30% flat tax on French-sourced NFT income, with possible treaty reductions.
Always consult a French tax professional for personalized advice. Keep detailed records of all NFT transactions, as the tax authority may request documentation. With proper reporting, you can legally maximize your NFT earnings while staying compliant with French regulations.
