I was victim of crypto scam, but recovered my assets: will any gains be taxable in France?

Reader question: I recently suffered from a scam relating to cryptocurrency that I held, but I engaged specialists to try to get it back.

I understand gains are taxable at 30%, but is this only after they have been converted to euros and added to my bank account? I assume the original investment can be returned to my French bank account without any tax liability?

Tax liability for this kind of asset occurs at the point at which they are converted to euros, whether or not these euros are then transferred into an ordinary account from a cryptocurrency account (another taxable event is if you buy something with them). 

It is the capital gain represented by the amount cashed in compared to the cost of buying the currency originally that is taxed, and not the full amount converted, that is liable to the ‘flat tax’.

The latter includes 12.8% income tax + 18.6% social charges (unless you benefit from a reduction to 7.5% as another country pays for your healthcare), making a total of 31.4% of ‘flat tax’ (formerly 30%). 

The declaration is done at the same time as your declaration for other income received in the same year.

Note also that the existence of cryptocurrency accounts held abroad should be declared as part of the annual declaration also, in the 3916-3916 bis section.

If declaring online you will need to select the rubriques (sections) including Plus values et gains divers and Comptes, contrats ou placements à l’étranger, and annexe form 2086.

To complete the 2086 you need details including the value of your total cryptocurrency portfolio when originally purchased as well as details of previous conversions of amounts into euros.

You should check the guidance notes to the form by searching for it on the Impots site for more details of how to do this.