Bitcoin and Taxes in 2021 – What Are You At Risk for Failure to Report?

If you’ve been following my series of articles on taxation, you now know how to report your accounts and capital gains. But what happens if you make a mistake or forget it? Come and discover, in this article, the consequences of such an eventuality.

Reporting obligations for digital assets

If you are a tax resident in France , then you are accountable to the tax authorities for your activities within the Financial Peak. In the eyes of the tax authorities, you have 3 obligations in terms of crypto declaration:

If you are one of Andreas Antonopoulos ‚ collaborators , and you are paid in bitcoins, you must declare this income. In addition, the units of crypto-assets obtained through mining are also to be declared as income. But we will come back to this subject in detail in a future article.

Regarding the calculation, then the declaration of your capital gains , I invite you to consult the article already published on the subject . Regarding the declaration of digital asset accounts , I outline the modalities in this article .

Sanctions relating to failure to report

When your declarations to the tax authorities contain omissions or errors, it can cost you dearly. Each tax obligation is accompanied by sanctions , which are more or less important according to the fault.

Failure to report digital asset accounts

Let’s start with the consequences of not reporting digital asset accounts. The Article X of the 1736 Tax Code establishes that any breach of the reporting obligation will be sanctioned with a fine of 750 euros . In the event of an omission or inaccuracy that you have not rectified yourself, the fine will be 125 euros .

The fines are increased to 1,500 and 250 euros when the value of the undeclared account exceeds 50,000 € during the year concerned by the declaration.

Non-declaration of capital gains

Now let’s move on to the declaration of capital gains. If you make a mistake in calculating the amount of your overall capital gain, then the tax may be increased by 10% . In the event of a simple error, rectified within 30 days , you will be considered in good faith and the increase will be canceled.

However, in the event of a deliberate breach or in bad faith , the increase will be 40% of the sums due. A deliberate breach is characterized by a partial declaration accompanied by the declarant’s desire not to provide all the information requested by the tax authorities.