French lawmakers voted to tax “unproductive wealth.” This new measure includes certain crypto holdings above a €2 million threshold.
French lawmakers have voted to advance a new tax amendment. The levies would be imposed on “unproductive wealth.” Furthermore, some of the crypto holdings and property are covered under this definition. The amendment was introduced in the Senate by Jean-Paul Mattei, centrist MP, on October 22. The measure was passed late on Friday by the National Assembly.
Lawmakers Advance Amendment Targeting Wealth Outside Real Economy
The change was passed in a close vote through the country’s lower house. Specifically, the vote was 163-150. Furthermore, the measure got support from socialist MPs and far-right MPs. Thus, the political message is pretty transparent. Consequently, the amendment puts crypto on par with an unproductive reserve.
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However, this instrument still has to pass through the rest of the parliamentary process. Specifically, there are lawmakers who are trying to get the 2026 national budget approved. Therefore, the amendment is up for a vote in the senate first and then becomes law. Hence, its final implementation is not yet clear.
The reform aims at strongly promoting investment. Specifically, it focuses on assets that directly support economic activity. This means, on the other hand, that it is discouraged to build up wealth in “unproductive” assets. Therefore, this measure is designed to eliminate an existing inconsistency.
In fact, Matteii pointed out that other assets were not taxed in earlier time periods. For instance, gold, coins, yachts, and art were not counted. However, these assets are not productive of jobs or innovation. Thus, the reform aimed at redressing this historical injustice. This unproductive capital is valued at no more than EUR 2 million.
Crypto Industry Warns Measure Could Force Sales and Tax Unrealized Gains
The proposed tax would be a 1% flat tax for every year. Specifically, this tariff applies to the amount of assets above the euro two million limit. In addition, the measure would impact owners of cryptocurrencies. This includes capital assets that have shown value increase but have not been sold. Thus, it would be able to tax unrealized gains each year.
What is more, this is a major departure from the current law. Specifically, only the capital gains are taxed under the current law when converted to fiat currency. As a result, non-active traders are assessed a 30% flat tax on gains realized. Crypto-to-crypto trades are, at the moment, not taxable.
Therefore, there have been serious concerns in the cryptocurrency industry in France. Specifically, they say that the measure is unfairly directed against savers. In addition, it penalizes investors who hold crypto as a store of value. Eric Larchevoux, co-founder of Ledger, warned against the proposal.
Indeed, Larchevoux said the measure punishes savers. Specifically, they would like to tie their money to Bitcoin or gold. In addition, they are doing it to secure their future wealth. As a result, the measure shows a gross ideological mistake. It is a type of taxation that is unfairly directed towards wealth outside of the fiat monetary system.
Additionally, crypto holders in France may be forced to sell their holdings. In particular, they might have to pay the new tax if they have no other liquid funds. Besides, critics are afraid that the threshold of two million euros could easily be reduced. So, it is still possible that the law will be effective on January 1, 2026.
