Even though Bitcoin is recognized by the IRS as property rather than currency, it is still expected to be reported on tax documents within the US. The French Ministry of Economy and Finance are now also subjecting revenues of the digital currency to taxation.
French Tax Authority
The French Tax Authority reveals further information as to who is subject to taxation and how. It is known that under French law, there is a certain point of acceptance for smaller revenues for those whose lives don’t revolve around using the digital currency regularly.
A spokesperson from the French Ministry explained to French news outlet, Le Monde:
“For the time being, there is no declarative obligation in what concerns bitcoin. All taxpayers are required to declare all their revenues, including those originating from abroad. This said, there is a certain tolerance [from the state authorities] regarding minor and irregular revenues, for instance from occasional sales.”
Unlike the IRS ruling of the digital currency to be recognized as property, France has yet to declare Bitcoin’s legal status. This makes taxing it all the more difficult.
The French Banking Federation claims bitcoin is not illegal, but that they will get involved with Bitcoin’s ruling if tax authorities can not understand the declaration. The bank may resort to asking its clients if bitcoin is their main means of using money.
Back in December 2013, the French Tax Authority stated:
“Bitcoin cannot be considered as a currency, given that it is possible to refuse payment made in bitcoin without violating article R642-3 of the Penal Code which sanctions refusal of banknotes and coins denominated in the euro.”
However, bitcoin is recognized as an electronic currency, but not as a legal monetary unit.
In January 2014, the French Senate conducted a hearing on the state of bitcoin and other digital currency options. They viewed digital currencies as a form of competition between powerful economies like the USA, Germany and UK, and discovered that they did not want to be left behind.
The hearing focused more on the negative points; volatility and investment hazards. Bitcoin’s involvement in unlawful activities was also mentioned as a concern. Overall, the hearing got through to some who had uncertainties of Bitcoin, and Bitcoin supporters were able to get their points across.
For more bitcoin news, stay tuned to CoinReport.