Crypto Taxes 2022: What should be stated in the 2021 tax return?

Let’s go for cryptocurrencies in the tax return!The income statement received in 2021 has opens April 7, 2022. It is therefore worth keeping in mind what to disclose if you are in possession of digital assets and if you have made certain transactions such as transfers or payments.

Statement of accounts opened, held or closed in a unit based abroad

First, since 1989, all foreign financial accounts held by a French taxpayer must be reported to the tax authorities. With Finance Act for 2019this obligation has been extended to digital asset accounts opened, used or closed in a unit based abroad. Back on this obligation to declare digital asset accounts!

Targeted account holders

The obligation to indicate accounts located abroad relates natural personsthat associations and companies that do not have the commercial form (1649 bis C of the General Tax Code), domiciled or established in France.

If the foreign accounts are thus kept by one SARL (or EURL)a CNSa SAS (or SASU)a HER or a Partnershipthere will be no reporting obligation.

The type of account to be reported

First, it will be necessary to declare accounts opened, used or closed with a neobank which is based abroad (for example: Revolut, N26). Similarly, opened accounts with financial services brokersas Robin Hoodis subject to the reporting obligation.

Secondly, this reporting obligation also applies digital asset accounts opened, used or closed with a exchange abroad during the year 2021. If you have thus opened, used or closed an account with Binance, FTX, crack or KuCoin (to name a few), they will have to be declared. On the other hand, if your digital asset account was opened with a French platform like Justmining, Paymium Where Feel mining then it will not be not necessary to make his opinion.

How is the declaration of accounts based abroad performed?

If you have one or more accounts described above, you must report these accounts to the tax authorities by filling out the form Cerfa No. 3916 for bank accountsand Cerfa No. 3916-bis for digital asset accounts. These Cerfa must be completed at the same time as money back in tax for natural persons, or of results for associations and non-commercial enterprises.

It must be understood that it is necessary to fill so many forms that you get opened, used or closed accounts in a unit located abroad.

Enter your crypto exchange accounts using the Cerfa 3916-bis form
Cerfa 3916-bis-form for declaration of foreign digital asset accounts – Source: tax department

This approach is quite boringalthough we can now find the addresses of the different ones exchanges quite easily in their terms and conditions or on the internet. In addition, if you have already reported accounts on last year’s tax return, you have the opportunity to click on “report” when submitting online. This action allows you to gain time by directly reporting the information in your 2020 tax return.

What is the risk of not reporting these accounts?

Failure to report digital asset accounts is subject to a tax penalty. The taxpayer has no not declared a digital asset account covered by the obligation is liable to a 750 € in fine (per undisclosed account). Provided an omission or an erroris the fine 125 €. These fines are limited to € 10,000 by tax return.

Moreover amount of these fines become double on the market value of digital asset accounts opened, used or closed with foreign exchanges is greater than € 50,000 has a any time of the year declaratory.

>> Do you want to trade Bitcoin and cryptocurrencies without breaking the bank? AscendEX opens its arms to you (affiliate link) <

Declaration of capital gains on the sale of digital assets

Not all transactions you make with your digital assets are necessarily taxable. We must therefore go back to those that are before we explain to you how to report taxable transactions to the Administration when you file your 2021 tax return.

Taxable transactions

Let’s start on the bright side! In the event that a taxpayer has purchased cryptocurrency to keep themthen he must not report his transactions to the tax authorities.

So, in case the taxpayer has bought cryptocurrencies that he has resold for stablecoinseven there it will not have Nothing to declare.

Finally the exchanges of cryptocurrencies against other cryptocurrencies is also exempt from taxation and must therefore not be reported to the Administration. In short, in these three cases taxpayer is not taxable on its transactions carried out in digital assets. So if you have only made these types of transactions, you can stop reading at this point.

Let us now turn to the transactions that constitute a taxable event. This is the case with reselling your digital assets for one currency that is legal tender (fiat). Also if you buy goods or services Using cryptocurrencies, these payments should be taken into account when calculating your capital gain. These two transactions are taxable events under the tax regime applicable to digital assets.

How do you indicate your capital gains on digital assets in the 2021 tax return?

If you have made one or more taxable transactions, you must complete the document Cerfa No. 2086 “Statement of capital gains or losses after disposal of digital assets”. You must then enter number of taxable divestitures which you have made. The online space limit their number to 100.

If you realized it more than 100 taxable waiverswe advise you to send one message from your declaration room via secure message explaining your problem. You will thus be able to request permission from the tax authorities to send one painting corresponding to Cerfa No. 2086, to make a declaration in good and due form. In general, the administration’s response is positive.

Next week we will return to calculation of capital gains disposal of digital assets. This calculation is crucial to complete Form 2086 correctly.

Finally, with regard to the activity of cryptocurrency mining, the earnings from this activity must be stated in the category of non-commercial profits (BNC). Taxed in the BNC category, these gains will thus be subject to the scales and the progressive income tax.

Does the tax return scare you? Be sure the Journal du Coin is there to help you in this daunting exercise. To support our work, sign up today on the AscendEX platform. In addition, you get a 10% discount on your trading fees! (affiliate link, see terms and conditions on the official website).

Leave a Comment