French Parliament Committee Approves 31.4% Tax on Stablecoin Conversions Beginning 2027

TLDR

• On October 7, France’s finance committee backed a proposal to impose taxes on profits from specific crypto-to-stablecoin exchanges effective January 1, 2027.
• The measure targets only electronic money tokens regulated under the EU’s MiCA framework, excluding other stablecoin types.
• Profits would be subject to France’s standard 31.4% flat-rate levy, combining 12.8% income tax with 18.6% social security charges.
• Additional measures under review include an exit tax for departing crypto investors, ten-year loss carryforward provisions, and mandatory reporting for self-custody wallets.
• Parliamentary approval is still required before any provisions take effect.

France is advancing legislation that would impose taxes on profits generated from certain cryptocurrency-to-stablecoin conversions. If lawmakers approve the measure, it would become effective on January 1, 2027.

The National Assembly’s finance committee greenlit the provision on October 7 as part of France’s 2027 budget package, which awaits a comprehensive parliamentary vote.

Under current regulations, French cryptocurrency holders incur tax liabilities when converting digital assets to fiat currencies like the euro. Tax obligations also arise when purchasing goods or services with cryptocurrency.

Conversions between different digital assets, however, generally remain tax-neutral. The liability is postponed until the investor converts holdings into traditional currency.

What the Stablecoin Tax Proposal Would Change

Known as Amendment I-CF1826, the provision was put forward by legislator Nicolas Sansu along with co-sponsors. It would modify Article 150 VH bis within France’s tax legislation.

The amendment specifically addresses exchanges where investors receive electronic money tokens that fall under the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework. These digital instruments are engineered to maintain value parity with a single fiat currency.

The scope is deliberately narrow. Only electronic money tokens meeting MiCA’s specific definition would fall under the new tax treatment, leaving other digital assets unaffected.

Proponents argue the existing framework creates a tax avoidance pathway, allowing investors to convert cryptocurrency profits into cash-equivalent tokens without triggering tax events. The amendment would eliminate this distinction by treating such exchanges identically to fiat conversions.

How the 31.4% Crypto Tax Would Work

France applies a 31.4% flat tax to capital gains from digital asset transactions. This composite rate comprises 12.8% income tax plus 18.6% in social security levies.

Investors retain the option to elect progressive income tax treatment instead, though the flat rate serves as the standard approach.

Taxation would apply exclusively to realized gains rather than transaction values. Gains would be determined after deducting acquisition costs and qualifying transaction fees.

For holdings acquired at varying prices, the proposal incorporates an average cost methodology. Investors holding assets before 2027 could reference their documented purchase prices or apply the aggregated cost basis of their entire portfolio as calculated on December 31, 2026.

Legislators are simultaneously examining additional cryptocurrency tax reforms. One committee-approved measure would expand France’s exit tax regime to certain cryptocurrency investors relocating abroad.

That provision would affect individuals who maintained French tax residency for a minimum of six years during the preceding decade and control portfolios exceeding €800,000 in value. Implementation would also commence on January 1, 2027.

Another approved measure would permit investors to apply cryptocurrency losses against digital asset gains for a decade. Present regulations generally restrict loss offsetting to the year in which they occur.

A pending amendment would mandate disclosure of self-custody wallets containing at least €100,000 at year-end. Non-compliance could result in penalties reaching €10,000, though this particular proposal has not yet secured committee endorsement.

Committee approval represents an intermediate legislative step rather than final enactment. The 2027 budget package, incorporating the stablecoin tax measure, must undergo full parliamentary debate before these modifications can become binding law.