Crypto buying and selling platform Binance was granted digital asset service provider status by the French Autorité des marchés financiers this week. The company gains credibility and seriousness with French users, but it also has an impact for taxpayers…
Binance has set foot in France, by registering with the Autorité des marchés financiers. Its new official status as a Digital Asset Service Provider (DASP) demonstrates “ the company’s seriousness and desire to comply with international regulators “, explained David Prinçay, the director of the French branch of the Chinese platform.
The tax authorities keep watch
But this status comes with new tax responsibilities, not only for the platform itself, but also for taxpayers who use Binance to manage their cryptocurrencies. In a thread on Twitter, the firm Revo Avocats explains the consequences.
What tax impacts following this announcement?🤔#taxes
— Revo Lawyers (@RevoLawyers) May 5, 2022
Binance’s registration as a PSAN removes the obligation for a French client to declare the possession of an account on the French platform. From next year (it’s too late for the 2022 tax declaration), it will no longer be necessary to fill in the 3916-BIS form which tells the taxman that you have an account on a crypto platform based abroad.
So less administrative hassle, but be careful. The tax authorities will now be able to ask Binance for documents related to the activity of French users. In summary, it will be easier for the tax authorities to verify the information given by a taxpayer who is a fan of bitcoin on his tax return (although Bercy already has the possibility of making requests for international assistance for platforms that are not not declared in France).
If Binance refuses to comply, the company is liable to a fine of 10,000 euros for each request not filled in. The other fear for individuals is the requalification by the tax authorities as a professional investor. When an individual exchanges crypto for another crypto and realizes a capital gain, he does not pay tax on the transaction.
On the other hand, a professional investor is taxable on this transaction, and the tax can amount to up to 66.2%. If the tax authorities determine that a taxpayer is indeed a “hiding” professional, he may be subject to this level of taxation. However, with easy access to data on Binance, Bercy has all the cards in hand.