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Regularising Crypto-Asset Wallets Held Abroad

We advised an individual who wished to regularise, on his own initiative, crypto-asset wallets opened with platforms established outside France, together with the corresponding capital gains.

By Cassandre Nogues, tax lawyer·Published

The situation

The individual had been investing in crypto-assets since 2020, on three exchange platforms established outside France and in self-hosted wallets, for a total of €42,000 paid in from his French bank accounts. He had traded between assets and made several withdrawals in euros over the period.

He had never attached return no. 3916-3916 bis to his income tax returns, nor filed schedule no. 2086, and the gains realised had not been declared. He wished to regularise voluntarily and to know his exposure.

Our support

  1. 01

    Characterising the accounts and listing the wallets

    A crypto-asset wallet falls under Article 1649 bis C of the CGI, and not under Article 1649 A, which applies to bank accounts. The penalty is €750 per undeclared wallet, against €1,500 per bank account.

    We established, platform by platform:

    • the contracting entity and its country of establishment, year by year;
    • the date on which the account was opened and, where applicable, closed;
    • the account identifier or the email address used to open it;
    • the years in which the wallet had been opened, held, used or closed;
    • the highest market value reached during each year.
    Point of attention. Self-hosted wallets fall outside this obligation, which covers only accounts opened with an entity established abroad. They do, however, enter into the calculation of the capital gains.
  2. 02

    Reconstructing the portfolio and quantifying the undeclared gains

    The obligation to report the account stands on its own and settles nothing as to the tax. Taxation presupposes a disposal for consideration within the meaning of I of Article 150 VH bis of the CGI.

    We went back through the full transaction history in order to separate:

    • conversions into euros and payments for goods or services, which are taxable disposals;
    • exchanges between crypto-assets with no cash balancing payment, outside the scope in the year of the exchange;
    • the years in which the total disposal proceeds did not exceed the €305 threshold;
    • the total acquisition price of the portfolio, reconstructed from the outset.

    The gain is calculated on the portfolio as a whole, in proportion to the disposal price relative to the overall value on the day of the transaction, and not platform by platform or disposal by disposal.

    Withdrawals in euros amounted to €165,000 over the period. Once the total acquisition price had been reconstructed and the proportion applied, the net taxable gain stood at €128,000, that is €38,400 of tax at the flat rate applicable to the years concerned, 12.8% plus social levies of 17.2%.

    Point of attention. This reconstruction presupposes the full transaction history, to be retrieved while the account remains accessible. A platform that ceases to operate takes with it the only source establishing the total acquisition price.
  3. 03

    Determining the exposure and the reassessment period

    One form is due per wallet and per year.

    Simplified example: three wallets undeclared over six years amount to 18 forms, that is €13,500 at the €750 rate. For the years in which the market value of the wallets exceeded €50,000, the rate rises to €1,500, that is €4,500 for the year. Over five years at the higher rate and one at the basic rate, the penalty reaches €24,750, each annual amount remaining below the €10,000 cap per return laid down by the same provision.

    The €50,000 threshold is assessed on market value and not on the sums paid in. A single crossing during the year is enough to double the rate for that year.

    The tax authorities may reassess until the end of the tenth year where the obligation under Article 1649 bis C has not been met, pursuant to the fifth paragraph of Article L. 169 of the LPF, the French code of tax procedure.

    Point of attention. The penalty follows the same period as the tax. The first paragraph of Article L. 188 of the LPF aligns with the tax itself the penalties sanctioning breaches of the assessment rules, including fixed penalties.

    On top of the penalty and the tax comes late payment interest, at the rate of 0.20% per month laid down in III of Article 1727 of the CGI. For income tax, it runs from 1 July of the year following that in respect of which the tax is assessed, until the last day of the month in which the return is filed. Calculated year by year on the omitted tax, it amounted to €3,024 before the reduction provided for in V of the same article.

  4. 04

    Filing the regularisation and the request for remission

    Since 1 January 2026, crypto-asset service providers have been collecting the identity, tax residence and transaction details of their users. The first report to the tax authorities is due on 15 June 2027 and the first exchange between administrations on 30 September 2027.

    The file was submitted with:

    • the missing returns no. 3916-3916 bis, one per wallet and per year;
    • the amended returns and schedules no. 2086 for the years in which disposals had taken place;
    • payment of the tax, enclosed with the filing;
    • a letter setting out the origin of the omission, its scope and the voluntary nature of the step;
    • a request for remission based on 2° and 3° of Article L. 247 of the LPF.

    The request followed the criteria set out in the published administrative guidelines: circumstances of the breach, loss suffered by the Treasury, benefit derived from the omission, the taxpayer’s usual conduct, any history of disputes, the possibility of an error in interpreting the law, and ability to pay.

The result

The undeclared gains were reported and the €38,400 of tax paid at the time of filing. The 80% surcharge under Article 1729-0 A of the CGI presupposes a reassessment and did not apply, which represented €30,720 on that tax. The late payment interest was halved under V of Article 1727 of the CGI, payment having accompanied the filing, that is €1,512 instead of €3,024.

Characterising the accounts under Article 1649 bis C kept the penalty at the rate applicable to crypto-asset wallets, rather than at the bank account rate. Of the €24,750 incurred, the request for remission led to a write-off of €20,250, bringing the penalty down to €4,500. The wallets were built into the client’s annual reporting, together with the non-fungible tokens now covered by the provision since 1 July 2026.

The situation dealt with here combined several wallets and undeclared disposals. Where the omission concerns one or two accounts and no disposal has been made, the regularisation is far simpler: it is limited to filing the missing forms no. 3916-3916 bis, with no amended income tax return and no tax to pay, and the request for remission then rests on the absence of any loss to the Treasury.

We recommend acting without delay. From 15 June 2027, under the DAC 8 directive, the tax authorities will receive from the platforms the identity of their users resident in France together with the details of their transactions, that information then being exchanged between administrations from 30 September 2027. Crypto-asset accounts join the automatic exchange regime already applicable to bank accounts. The step retains its voluntary character, and the benefit attached to it, only if it is taken before any request from the tax authorities.

This case was handled by the firm, in light of the law and case law in force at the time of the engagement, and in the light of circumstances specific to it. It is presented for illustration purposes only: it does not constitute advice and does not predetermine the treatment that might be adopted in another matter.