France’s Proposed Crypto Tax is “Economically Unjust”: Experts

France’s Nationwide Meeting has adopted a controversial wealth tax modification that, for the primary time, explicitly targets cryptocurrency holdings, triggering criticism from business specialists who warn the measure might penalize innovation and drive expertise overseas.

Modification No. I-3379 to France’s 2026 Finance Invoice, handed by a slender 163-150 vote final Friday, provides digital belongings below Article L.54-10-1 of France’s Financial and Monetary Code to a brand new “unproductive wealth” tax base alongside gold, yachts, and traditional vehicles.

The measure, launched by centrist MP Jean-Paul Mattei of the Les Démocrates group, imposes a flat 1% annual tax on internet wealth exceeding $2.2 million (€2 million), up from the earlier $1.49 million (€1.3 million) threshold.

Whereas the invoice goals to encourage productive funding by exempting sure long-term rental properties, crypto receives no such carve-out.



The modification doesn’t distinguish classes of crypto holders and fails to exempt tokens obtained by way of enterprise exercise, workforce vesting, or community incentive packages.

Trade specialists say the dearth of nuanced definitions has difficult the tax remedy for crypto founders and builders.

Joe David, CEO and Founder at Nephos, knowledgeable companies agency for the digital asset business, advised Decrypt the invoice “dangers oversimplifying” the crypto panorama by failing to differentiate between passive buyers and ecosystem builders whose tokens symbolize “years of contribution, innovation, and threat taking.”

He warned the measure might “inadvertently penalize productive capital” driving technological progress in France’s digital economic system and would not align with “international requirements” on crypto taxation.

The most recent proposal would upend its 30% sale-only crypto tax, changing it with an annual wealth levy on holdings—taxing cash “whether or not or not they’re offered.”

Burçak Ünsal, Managing Associate at ÜNSAL Attorneys at Regulation, advised Decrypt the modification fails to carve out token issuers and founders who maintain belongings as a part of their operational function.

Taxing early token-holders may very well be “economically unjust,” he famous, when their function is ecosystem-building, creating an “unintended disincentive” for long-term alignment.

Ünsal warned that with out clear definitions distinguishing skilled from occasional merchants, there stays “tax-structuring threat” for token-based enterprise fashions.

The invoice lacks clear definitions distinguishing occasional from skilled merchants, Ünsal mentioned, noting that the excellence “can be decided on a case-by-case foundation” contemplating “quantity, frequency, and proportion of crypto earnings.” He warned that till “implementing decrees or steerage” make clear the principles, a “tax-structuring threat” stays for token-based companies.

Austin Yuanlun Yin, US-licensed CPA and President of the World Council on Crypto Taxation, advised Decrypt the reform “dangers punishing innovation” and that taxing crypto closely “will speed up capital flight” since buyers can transfer digital belongings throughout borders in minutes.

“By lumping digital belongings like Bitcoin with yachts and artwork below a ‘tax on unproductive wealth,’ France is sending a message that capital held in crypto is idle moderately than dynamic. That’s inaccurate and shortsighted,” Yin mentioned.

As an alternative of taxing crypto holdings as ‘unproductive,’ policymakers ought to “acknowledge their function in funding startups, decentralized infrastructure, and digital innovation,” he added.

The invoice now heads to the Senate earlier than a second studying within the Nationwide Meeting. Lawmakers have 70 days to finish deliberations, with closing adoption required by December 31, 2025.