Key points
- HMRC is the United Kingdom’s tax authority; the question concerns the traceability of transactions for taxpayers resident in France.
- The blockchain records transactions in an immutable and public way: pseudonymity does not amount to complete anonymity.
- In France, Article 1649 bis C of the French Tax Code (CGI), introduced by the 2019 Finance Act, requires you to declare every year the crypto-asset wallets you hold abroad.
- For an individual, capital gains are subject to an overall tax charge of 31.4% for 2026 income (12.8% income tax and 18.6% social levies) or, on election, to the progressive income tax scale.
- In the United Kingdom, the Cryptoasset Reporting Framework (CARF) requires cryptoasset service providers to report their users’ 2026 data to HMRC between 1 January and 31 May 2027.
- Since 1 July 2026, crypto-asset service providers must be authorised under the EU MiCA Regulation to operate in France; the former registration of PSANs with the AMF (French Financial Markets Authority) has ended.
HMRC (HM Revenue & Customs) is the United Kingdom’s tax authority, responsible for collecting taxes and duties. When it comes to cryptocurrencies, the visibility and traceability of transactions is a crucial question, particularly for taxpayers resident in France.
Traceability of cryptoasset transactions
The blockchain, the technology underlying cryptocurrencies such as Bitcoin, records transactions immutably. Every transaction is public and can be viewed by anyone, although participants are anonymised by alphanumeric addresses. However, this pseudonymity is not the same as complete anonymity. Matched against the identification data that platforms report to tax authorities, including HMRC, these transactions can be linked to specific individuals.
Reporting obligations in France
In France, the 2019 Finance Act introduced an obligation for taxpayers to declare all their digital asset accounts held abroad, including cryptocurrency accounts (Article 1649 bis C of the French Tax Code (Code général des impôts) (in French), which now covers crypto-asset wallets). This declaration must be made every year with the income tax return. Failure to comply is punished by a fine of €750 per undeclared wallet, raised to €1,500 where the value of the wallets exceeds €50,000 (Article 1736, X of the CGI).
Cryptocurrency transactions, such as the sale or exchange of these assets, must also be declared. The applicable tax regime depends on the taxpayer’s status: individual or professional. For an individual, capital gains are subject to the flat rate of 12.8% income tax (Article 200 C of the CGI); with social levies of 18.6%, the tax charge reaches 31.4% for 2026 income (30% previously), unless you opt for the progressive income tax scale.
Cooperation between tax authorities
Tax authorities around the world, including HMRC and the French tax authorities, cooperate to identify tax fraud involving cryptocurrencies. The Cryptoasset Reporting Framework (CARF), a framework developed by the OECD, organises the collection and reporting of data on cryptoasset users. In the United Kingdom, cryptoasset service providers report to HMRC their users resident in the United Kingdom or in another country that has joined this framework; in the European Union, the DAC8 directive has transposed this mechanism.
Tighter regulation and controls
Until 30 June 2026, in France, digital asset service providers (PSAN) were subject to registration with the AMF (Autorité des marchés financiers). Since 1 July 2026, crypto-asset service providers must be authorised under the EU MiCA Regulation. This regulatory framework aims to increase transparency and to protect investors against fraud. These providers must meet strict security and compliance standards, which makes it easier for tax authorities to access the information needed to check transactions.
The obligations of exchange platforms
Cryptocurrency exchange platforms operating in France must comply with strict requirements, including MiCA authorisation, and report their users’ transactions to the French tax authorities (DAC8 framework, Article 1649 AC bis of the CGI). HMRC, for its part, receives reports from providers offering cryptoasset services in the United Kingdom; failure to report, or a late or inaccurate report, can expose them to a penalty of up to £300 per user.
In addition, banks and other financial institutions in France must report to the financial intelligence unit any sums or transactions they suspect derive from an offence punishable by more than one year’s imprisonment or from tax fraud, or are linked to terrorist financing, including where they involve cryptocurrencies (Article L. 561-15 of the French Monetary and Financial Code (Code monétaire et financier) (in French)). This reporting obligation contributes to the fight against money laundering and terrorist financing, thereby increasing the traceability of cryptocurrency flows.
Risks for those who do not declare
Failing to declare your cryptocurrency assets or the gains made can lead to heavy penalties, including fines and criminal prosecution. To detect non-declarers, HMRC and the French tax authorities rely in particular on reports from exchange platforms and other financial intermediaries, and on the traceability of transactions on the blockchain.
HMRC can therefore become aware of cryptocurrencies held with providers that offer their services in the United Kingdom, since those providers must report their users to it. As a taxpayer, you need to comply with your tax obligations to declare digital assets in order to avoid severe penalties. International regulations and cooperation between tax authorities make tax evasion through cryptocurrencies increasingly difficult. A crypto law firm can assist you with your reporting obligations. Every situation is different.
For the full set of rules, see our guide to crypto taxation in France. If your situation is complex or you are subject to a tax audit, a crypto tax lawyer can assist you.
