France Moves to Tax Stablecoin Swaps as 10-Year Crypto Loss Relief Advances

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French lawmakers have passed a bill to require taxation on certain crypto trades involving stablecoins and to extend the capital loss carryback period for cryptocurrency investors to 10 years. New laws related to cryptocurrency trading are part of a draft budget document for fiscal year 2027 and need further legislative action to take effect.

The National Assembly Finance Committee passed a bill amendment related to stablecoins on October 7. A separate bill amendment would permit investors to deduct past capital losses from future capital gains along with current-year capital losses.

• France Targets Stablecoin Conversions Under 2027 Tax Plan
• Crypto Loss Relief, Exit Tax and DAC8 Reporting

France Targets Stablecoin Conversions Under 2027 Tax Plan

Amendment I-CF1826, submitted by Nicolas Sansu, would impose a tax on conversions of traditional currency to electronic money tokens as of January 1, 2027. Electronic money tokens are explained in the EU Markets in Crypto-Assets Regulation and other documents and include qualifying fiat-pegged stablecoins.

E-commerce transactions using‌ cryptocurrencies are exempt from capital gains tax. Capital‌ gains tax exemptions are available for investors trading Bitcoin and Ethereum for stablecoins pegged to the U.S. dollar and euro.

The proposed rule change would remove the‌ deferral that applies to stablecoin transactions under the new rule. Gains and losses from stablecoin transactions will generally be‌ recognized under the new rule and taxed based on the sale price and basis of the stablecoins exchanged, including certain fees paid in connection with the stablecoin exchange.

For assets purchased before 2027, taxpayers can elect to report the cost basis of purchased assets or add purchased assets to those already owned on December 31, 2026,‌ and report an aggregate cost basis for all assets owned on the date. An election to use one‌ method is irrevocable.

Crypto Loss Relief, Exit Tax and DAC8 Reporting

Another committee-approved proposal, I-CF798 by Daniel Labaronne, would let taxpayers offset other digital asset gains with losses in the current year for up to 10 years. Taxpayers currently can use losses in the current year to offset digital asset gains in the same year. The proposal would lower taxes on digital assets but not make up for their declining value.

Laws aimed at at least partially bypassing the Sansu I-CF1822 proposal were approved on October 8. This proposal by Sansu would require some virtual currency holders who emigrate to other countries to pay an emigration tax if their holdings are valued at more than €800,000. The emigration tax is expected to take effect.

Also, DAC8 regulations in the European Union require reporting on crypto service users and transactions by covered entities starting in 2026 and information sharing about taxes paid by EU countries starting in 2027. Reporting this information does not make crypto transfers taxable events.

French companies Bull Bitcoin and Paymium challenged the national reporting rule. The Council of State, on September 17, rejected an appeal for emergency relief but reserved judgment on an appeal to annul the national reporting rule.

France reported $368 million in cryptocurrency capital gains on the tax returns of approximately 24,000 taxpayers in 2024. Chainalysis projected $9.4 billion in cryptocurrency transaction taxes in France in 2025 and said that amount does not reflect taxes owed but not paid.

All three budget amendments are suggestions made but not yet approved by committees, suggestions of new taxes currently under debate.

Source: bitcoinfoundation.org