France Adds Crypto to Wealth Tax, Sparks Industry Backlash

Amendment No. I-3379 to France’s 2026 Finance Bill represents a fundamental shift in the country’s approach to cryptocurrency taxation. Introduced by centrist MP Jean-Paul Mattei of the Les Démocrates group, the measure replaces France’s previous 30% tax applied only upon sale with an annual wealth levy that taxes crypto holdings ‘whether or not they’re sold.’ The legislation raises the wealth tax threshold from the previous $1.49 million (€1.3 million) to $2.2 million (€2 million) but notably excludes cryptocurrency from the exemptions granted to certain long-term rental properties deemed ‘productive’ investments.

Industry experts immediately raised alarms about the amendment’s failure to distinguish between different categories of crypto holders. The legislation provides no carve-outs for tokens obtained through business activity, team vesting schedules, or network incentive programs. Joe David, CEO and Founder at Nephos, told Decrypt the bill ‘risks oversimplifying’ the crypto landscape by treating all digital asset holders equally, regardless of whether they represent passive investors or active contributors to technological ecosystems.

Burçak Ünsal, Managing Partner at ÜNSAL Attorneys at Law, emphasized the particular risk to token issuers and founders who hold assets as part of their operational roles. He noted that taxing early token-holders could be ‘economically unjust’ when their primary function involves ecosystem-building, creating what he described as an ‘unintended disincentive’ for long-term project alignment and innovation within France’s digital economy.

The amendment’s classification of cryptocurrency as ‘unproductive wealth’ alongside luxury items like yachts and classic cars has drawn sharp criticism for its fundamental misunderstanding of digital assets’ economic role. Austin Yuanlun Yin, US-licensed CPA and President of the Global Council on Crypto Taxation, told Decrypt that ‘by lumping digital assets like Bitcoin with yachts and art under a ‘tax on unproductive wealth,’ France is sending a message that capital held in crypto is idle rather than dynamic. That is inaccurate and shortsighted.’

Industry leaders warn that the tax policy could accelerate capital flight from France, as digital assets can be moved across borders in minutes. Yin noted that taxing crypto heavily ‘will accelerate capital flight’ since investors have the technological capability to relocate their holdings to more favorable jurisdictions almost instantly. This mobility creates a competitive disadvantage for France in attracting and retaining digital asset innovation and investment.

The lack of alignment with global standards on crypto taxation further compounds the risks. Joe David of Nephos emphasized that the French approach doesn’t align with ‘global standards’ on crypto taxation, potentially isolating France as other jurisdictions develop more nuanced frameworks that recognize the unique characteristics of digital assets and their role in funding startups, decentralized infrastructure, and technological innovation.

The amendment’s passage creates significant legal uncertainty for crypto businesses and investors due to its failure to provide clear definitions distinguishing occasional from professional traders. Burçak Ünsal noted that this distinction ‘would be determined on a case-by-case basis’ considering factors like ‘volume, frequency, and proportion of crypto income,’ leaving substantial ambiguity for market participants.

Until ‘implementing decrees or guidance’ clarify the application rules, Ünsal warned that a ‘tax-structuring risk’ remains for token-based business models. This uncertainty could chill investment and innovation in France’s digital asset sector as companies struggle to understand their tax obligations and potential liabilities under the new framework.

The bill now proceeds to the Senate before a second reading in the National Assembly, with lawmakers having 70 days to complete deliberations and final adoption required by December 31, 2025. This legislative timeline provides a window for industry advocates to push for amendments that would create more nuanced treatment for different types of crypto holdings and address concerns about the measure’s potential impact on France’s position in the global digital economy.