France proposing tax on unrealized Bitcoin gains

French lawmakers are discussing a tax on unrealized capital gains for cryptocurrencies, potentially changing the way assets like Bitcoin are taxed.

The proposal would categorize cryptocurrencies like Bitcoin (BTC) as “non-productive property” alongside dormant real estate and luxury items like yachts. This classification would put them under the proposed “inefficient wealth tax” to replace the current property wealth tax

The idea, floated during the French Senate debate on the 2025 budget, proposes taxing increases in cryptocurrency value even if the assets have not been sold. This represents a departure from the current system, where taxes on cryptocurrencies are imposed only when profits are made (for example, when assets are sold).

The bill’s sponsor, Senator Sylvie Vermeillet, argued that this change would bring cryptocurrency taxation into line with other categories of wealth.

Last month, the Danish Tax Law Council proposed a bill to tax unrealized gains and losses on crypto assets under the inventory taxation model. The proposed bill aims to address unfair taxation of crypto investors and simplify tax rules for crypto assets.

This tax is not law…yet

Senate debate included a preliminary vote on the proposal. Remarkably, only supporting senators were present; This means the vote does not yet reflect a final decision or broader consensus. If the proposal is accepted, it will require approval from the French National Assembly before it becomes law.

For those unfamiliar with the concept, unrealized gains refer to the increased value of an unsold asset. For example, if the value of Bitcoin increases after it is purchased but is not sold, the owner does not currently owe any taxes on that increase. The proposed tax would change this by imposing a tax on paper gains even if the asset is not converted into cash.

This debate comes amid a global trend in which governments are grappling with how to regulate and tax cryptocurrencies.

In the US, crypto taxes only apply when assets are sold. Some countries, such as Germany and Portugal, offer tax exemptions for long-term assets or classify digital assets more leniently.