France Advances Tax Proposal Targeting Crypto as “Unproductive Wealth” – Will it Pass the Senate Vote?
France has moved a step nearer to taxing cryptocurrency holdings as a part of a sweeping reform of its wealth tax system, after lawmakers authorised a controversial modification labeling digital belongings as “unproductive wealth.”
The measure, launched by centrist MP Jean-Paul Mattei of the Les Démocrates group, was passed on October 31 by a slim 163–150 vote in the National Assembly throughout discussions on the 2026 draft finance invoice.
The proposal, nevertheless, should nonetheless move by way of the Senate and the remainder of the parliamentary course of earlier than turning into legislation.
Is France’s Crypto Tax a Push for Productivity or a Punishment for Holders?
The modification would substitute France’s current Impôt sur la Fortune Immobilière (IFI), the actual property wealth tax, with a broader Impôt sur la Fortune Improductive (IFI 2.0), or “tax on unproductive wealth.”
Under the reform, the scope of taxable belongings would develop past actual property to incorporate a spread of things seen as economically “inactive” or “non-productive.”
These embrace luxurious items such as yachts, personal jets, jewellery, collectible artwork, and, for the first time, digital belongings like Bitcoin and different cryptocurrencies.
The modification raises the tax threshold from €1.3 million to €2 million and replaces the present progressive charges (0.5% to 1.5%) with a flat price of 1% on the portion of web belongings exceeding that threshold.
According to the proposal, the reform goals to encourage funding in belongings that instantly contribute to financial exercise whereas discouraging the accumulation of wealth in belongings deemed “unproductive.”
“Gold, cash, basic vehicles, yachts, and artworks are excluded from the present tax base, but they signify types of wealth that don’t create jobs or innovation,” Mattei wrote in his abstract. “This reform corrects that inconsistency.”
The measure would additionally have an effect on taxpayers holding crypto that has appreciated in worth however has not been offered, elevating considerations it might successfully tax unrealized positive aspects.
Critics in France’s crypto trade say the measure unfairly targets savers and traders who maintain crypto as a retailer of worth quite than for hypothesis.
Crypto as ‘Unproductive Wealth’? France’s Tax Reform Sparks Debate.
Éric Larchevêque, co-founder of Ledger, warned that the proposal “punishes all savers who want to financially anchor themselves to gold and Bitcoin with a purpose to shield their future.”
He added that the political message is obvious: “Crypto is equated with an unproductive reserve, not helpful to the actual economic system.”
Larchevêque additionally expressed concern that many crypto holders could possibly be compelled to promote a part of their portfolios simply to cowl the new tax legal responsibility, significantly if their holdings are illiquid or risky
The slim vote revealed deep divisions throughout the French political panorama. The modification handed with help from an unlikely coalition of Socialist, centrist MoDem, and far-right Rassemblement National (RN) MPs.
The authorities and its Renaissance allies opposed it, describing the measure as “unsure in scope and income.”
Economists stay divided on the potential fiscal affect. Some Socialist MPs estimate the reform might herald as much as €2 billion in further annual income, whereas others, together with France’s Ministry of Public Accounts, project whole receipts between €1 billion and €3 billion, and even much less if rich households restructure their belongings to keep away from the tax.
Supporters argue the reform would push capital into “productive” areas such as enterprise funding, innovation, and inexperienced infrastructure.
Opponents warn it dangers penalizing savers, traders, and collectors whereas creating administrative complexities in valuing various belongings like digital currencies and artwork.
Crypto Taxation Already a Contentious Issue
France’s crypto tax framework has lengthy been a degree of debate. Under current law, people pay a 30% flat tax on realized crypto capital positive aspects, which means tax is just due when belongings are offered for euros or items. Crypto-to-crypto trades and holding (HODLing) aren’t taxed.
The present IFI raised €2.2 billion in 2024 from round 186,000 households, roughly half the €4.2 billion as soon as generated by the former ISF in 2017, in response to data from France’s tax administration (DGFiP).
If enacted, the new “unproductive wealth” tax would introduce a radically totally different precept: taxing unrealized positive aspects on crypto holdings yearly, even when traders haven’t offered their cash.
Critics say this might set a harmful precedent for taxing “paper income.”
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