Can you legally avoid the crypto flat tax in France? The legal options

The 31.4% flat tax applies to capital gains on disposals of digital assets made by private individuals from 2026. This rate combines 12.8% income tax and 18.6% social levies (30% and 17.2% for earlier gains). The word “avoid” does not refer to any fraud here. It means the lawful optimisation levers provided for by law. These levers rest on Article 200 C and Article 150 VH bis of the French Tax Code (Code général des impôts, CGI). Every situation is different and deserves an analysis specific to your tax household.

Understanding the crypto flat tax

The single flat-rate levy (PFU)

The single flat-rate levy applies to capital gains on disposals of digital assets made by private individuals on an occasional basis. Article 200 C of the French Tax Code sets the income tax rate at 12.8%. Social levies, raised from 17.2% to 18.6% for 2026 income, are added, bringing the overall rate to 31.4%. The taxable event is a disposal against legal tender, such as the euro, or the purchase of goods or services with digital assets.

The taxable gain is calculated on the overall net gain of the year. It takes into account the capital gains and losses made on all taxable disposals. This offsetting is already a first management lever. A capital loss in the year reduces the taxable base of capital gains of the same year.

Choosing the progressive scale if your tax bracket is low

Article 200 C of the French Tax Code provides for an option for the progressive income tax scale. This option, introduced by the Finance Act for 2022, applies to disposals made from 1 January 2023. It replaces the 12.8% flat rate with the progressive scale, while maintaining social levies (18.6% for 2026 income).

The option becomes worthwhile when your marginal tax bracket remains low. A taxpayer with a low tax rate may then lower their tax burden on the crypto gain. The option is exercised expressly on the overall income tax return, at the latest by the filing deadline. Without the option, the gain remains taxed at the flat rate. The option is global and irrevocable: it applies to all capital gains on disposals of crypto-assets of the year. These gains then join the household’s overall net income: the choice must therefore be assessed in the light of all your income, not just the crypto gain.

Using the exemption for small disposals

Article 150 VH bis of the French Tax Code provides for an exemption for small disposals. Persons whose total disposal price does not exceed €305 during the tax year are exempt. This threshold is assessed on the annual total of disposal prices, not on the gain.

This threshold works on an all-or-nothing basis. If the annual total of disposal prices exceeds €305, all disposals of the year become taxable, including those below the threshold. This mechanism requires careful tracking of the amounts disposed of. It may influence the timing of disposals. A taxpayer may choose to stay below the threshold in a given year, quite lawfully, in order to benefit from the exemption.

The other lawful optimisation levers

Crypto-to-crypto exchanges

Exchanges between digital assets are in principle not taxable. Tax arises on conversion into legal tender or on the purchase of goods or services. An exchange between two cryptocurrencies, or a conversion into a stablecoin, therefore does not trigger tax as long as no exit into euros takes place. This deferral of taxation is not an exemption. The gain will be taxed on the later taxable disposal. Keeping track of the history remains essential to reconstruct acquisition prices.

Taking fees into account

Fees incurred on a taxable transaction reduce the net gain taken into account. These transaction fees are deducted from the taxable gain, provided you keep the supporting documents. Keeping a complete history of transactions makes the calculation reliable. Tax tracking software helps reconstruct acquisitions, disposals and the related fees. This documentary rigour protects you in the event of a tax audit.

The professional regime

The regime described here concerns occasional disposals. A buying and reselling activity carried out on a habitual basis may fall under another regime. Since 1 January 2023, gains are then taxed in the category of non-commercial profits (bénéfices non commerciaux), under Article 92 of the French Tax Code. The boundary between private management and professional activity is assessed case by case. An incorrect characterisation exposes you to a tax reassessment.

Support from a tax lawyer

These levers are all lawful optimisation, never tax evasion. Concealing disposals or under-declaring exposes you to a tax reassessment and penalties. A tax lawyer helps ensure that your choices comply with the law. They analyse your overall situation, assess which option is most favourable and check the characterisation of your activity. Our team assists holders of digital assets: see our page on the crypto-asset lawyer. Every situation is different.

For all the rules, see our guide to crypto taxation.

FAQ

Can you legally avoid the flat tax on cryptocurrencies?
You cannot avoid it through fraud. The law does, however, provide lawful levers: the option for the progressive scale, the exemption for disposals below €305 a year, and taking fees and capital losses into account.

When is the option for the progressive scale worthwhile?
When your marginal tax bracket remains low. The option, provided for in Article 200 C of the French Tax Code, is exercised on the overall income tax return, irrevocably, and applies to all crypto capital gains of the year.

How does the €305 exemption work?
Article 150 VH bis of the French Tax Code exempts taxpayers whose annual total of disposal prices does not exceed €305. Above this threshold, all disposals of the year become taxable.

Is a crypto-to-crypto exchange taxable?
In principle, no. Tax arises on conversion into euros or on the purchase of goods or services. An exchange between digital assets defers taxation, without cancelling it.

What are the risks of under-declaring?
Concealing disposals or under-declaring exposes you to a tax reassessment and penalties. Only lawful optimisation is permitted.

Official sources

• Article 200 C of the French Tax Code (Code général des impôts) (taxation of capital gains on disposals of digital assets, 12.8% rate and option for the progressive scale) – Légifrance (in French)
• Article 150 VH bis of the French Tax Code (Code général des impôts) (regime for disposals of digital assets and exemption below €305 a year) – Légifrance (in French)
• BOFiP-Impôts, BOI-RPPM-PVBMC-30-30, occasional disposal of digital assets, taxation arrangements and reporting obligations – bofip.impots.gouv.fr (in French)

This article sets out the state of the law for general information purposes. It does not constitute legal advice. Every situation is different and deserves a dedicated analysis. Content compliant with the professional conduct rules of the legal profession.

For assistance: crypto tax lawyer: declaring and taxing crypto-assets.