France proposing tax on unrealized Bitcoin gains

French lawmakers are debating a tax on unrealized capital gains for cryptocurrencies, potentially altering how assets like Bitcoin are taxed. 

The proposal would categorize cryptocurrencies like Bitcoin (BTC) as “non-productive property,” alongside dormant real estate and luxury items such as yachts. This classification would place them under a proposed “unproductive wealth tax,” replacing the current real estate wealth tax

The idea, introduced during the French Senate’s debate on the 2025 budget, suggests taxing increases in cryptocurrency value even if the assets haven’t been sold. This represents a departure from the current system, where taxes on cryptocurrencies are only applied when profits are realized, such as when assets are sold.

Senator Sylvie Vermeillet, the proposal’s sponsor, argued that this change would align cryptocurrency taxation with other wealth categories. 

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

This tax isn’t law….yet

The Senate debate included a preliminary vote on the proposal. Notably, only supporting senators were present, meaning the vote does not yet reflect a final decision or broader consensus. If the proposal advances, it would need approval from the French National Assembly before becoming law.

For those unfamiliar with the concept, unrealized gains refer to the increased value of an asset that hasn’t been sold. For instance, if Bitcoin’s value rises after purchase but is not sold, the owner currently owes no taxes on that increase. The proposed tax would change this by applying levies on that paper gain, even if the asset isn’t converted to cash.

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

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