NFT Tax France: How to Pay Taxes on NFT Profits in 2024

Understanding NFT Taxation in France

Non-Fungible Tokens (NFTs) have exploded in popularity, but many French investors overlook their tax implications. In France, profits from NFT sales are subject to taxation under specific rules set by the Direction Générale des Finances Publiques (DGFiP). Whether you’re an occasional seller or professional trader, understanding how to pay taxes on NFT profit in France is crucial to avoid penalties. This guide breaks down everything you need to know about declaring and paying NFT taxes while staying compliant with French regulations.

How NFT Profits Are Taxed in France

French tax authorities categorize NFT transactions based on activity frequency and intent:

• Occasional Sellers: Pay flat-rate capital gains tax at 30% (12.8% income tax + 17.2% social charges)
• Professional Traders: Profits taxed as commercial income under BIC regime (up to 45% income tax + 17.2% social charges)
• Artists & Creators: Royalties and primary sales taxed as intellectual property income (up to 45% + social charges)

Key determining factors include transaction volume, holding period, and whether NFTs were created or purchased for resale. Professional status applies if you conduct regular transactions with profit-seeking intent.

Calculating Your NFT Tax Liability

Follow these steps to determine what you owe:

1. Calculate Capital Gain: Sale Price – (Acquisition Cost + Blockchain Fees)
2. Apply Allowances: Occasional sellers benefit from a €305 annual deduction after 2 years of ownership
3. Include All Costs: Add minting fees, gas costs, and marketplace commissions to your acquisition basis
4. Currency Conversion: Convert all crypto transactions to euros using exchange rates at transaction dates

Example: If you bought an NFT for 1 ETH (€2,000) and sold for 3 ETH (€6,000) with €200 in fees, your taxable gain is €6,000 – (€2,000 + €200) = €3,800.

Reporting NFT Profits: Deadlines & Procedures

French residents must declare NFT profits annually:

• Form 2042 C: Report capital gains in Section 3AN
• Form 2074: Attach for detailed capital gains calculations
• Deadline: May-June following the tax year (e.g., May 2025 for 2024 sales)
• Penalties: 10% fine for late declaration + 0.2% monthly interest on unpaid taxes

Keep detailed records including wallet addresses, transaction hashes, and exchange statements for 6 years.

Legal Tax Reduction Strategies

Minimize your NFT tax burden legally:

• Long-Term Holding: After 2 years, benefit from the €305 annual allowance
• Offset Losses: Deduct NFT capital losses from other crypto gains
• Micro-BIC Regime: Professional traders can opt for simplified taxation on 50% of revenue
• Artist Deductions: Creators can deduct up to 34.5% of royalty income as professional expenses

Note: Wash trading and fake transactions are illegal and trigger audits.

Frequently Asked Questions (FAQ)

Do I pay taxes if I sell NFTs at a loss?

No, France doesn’t tax capital losses. You can report losses to offset gains from other crypto assets.

Are NFT airdrops and gifts taxable?

Yes, airdrops are taxed as miscellaneous income at 60% (after €5,000 annual allowance). Gifts may trigger wealth tax if exceeding €100,000.

How does France tax NFT staking rewards?

Staking rewards are considered movable property income, taxed at 30% flat rate after deducting 7.5% for management fees.

What if I bought NFTs with cryptocurrency?

Each crypto-to-NFT transaction is a taxable event. You must calculate capital gain/loss on the crypto disposal first.

Can tax authorities track my NFT transactions?

Yes. Since 2023, French platforms must report user transactions under DAC8 regulations. Non-declaration risks audits.

Are there different rules for digital artists?

Yes. Artists selling original NFTs can benefit from reduced social charges (8% instead of 17.2%) under the artist-author regime.

What happens if I don’t declare NFT profits?

Undisclosed profits face up to 80% penalties + 3-year prison sentence for tax fraud exceeding €15,000.