National Assembly of France Delays 2027 Budget Vote Amid Crypto Tax Rejections

French National Assembly Delays Budget Vote

The French National Assembly has once again deferred the vote on the revenue aspect of its budget for 2027, just a few days after turning down proposals aimed at taxing unrealized cryptocurrency gains when investors relocate abroad. Following an indication released post-Monday’s session, lawmakers are set to continue discussions on the revenue measures on November 3, as a significant 758 amendments still await thorough examination, marking the second time the vote has been postponed.

Previous Setbacks and Amendments

This delay is in light of an earlier setback on October 20, when the Assembly faced unresolved debates regarding over 2,000 amendments. Lawmakers revisited the revenue provisions on October 27, after dedicating the prior week to conversations surrounding social security funding. One notable defeat occurred on October 30, when the Assembly dismissed amendment I-3904, proposed by Nicolas Sansu, which intended to integrate certain crypto assets into France’s existing exit-tax framework. In the official voting records, only 27 lawmakers were in favor while 55 opposed, with one abstention recorded.

Currently, France imposes exit-tax regulations on specific financial assets when eligible taxpayers transfer their residence outside the country. Sansu’s amendment would have encompassed cryptocurrencies, regardless if they were held directly, via exchanges, or in self-custody wallets, focusing on unrealized gains—profits existing on paper but not yet sold by investors. The rules were meant to affect eligible taxpayers relocating starting January 1, 2027.

Amendment I-3432, introduced by Mickaël Bouloux, encountered a similar fate, being rejected by a count of 60 to 31. This proposal was directed at unrealized gains from household cryptocurrency holdings surpassing €800,000 (approximately $897,000), aimed at individuals who had been French tax residents for a minimum of six out of the past ten years prior to moving abroad. Both amendments did not succeed in the current parliamentary discussions, leaving them excluded from the budget provisions currently under consideration.

Ongoing Cryptocurrency Proposals

While the exit-tax amendments did not gain traction, other cryptocurrency-related proposals remain part of the ongoing budget discussions. One such measure requires individuals holding at least €100,000 (approximately $112,000) in self-custodied cryptocurrencies to declare these assets to the French tax authorities. This proposal specifically addresses assets stored outside of regulated service providers.

Recent reports have highlighted potential penalties of up to €10,000 for taxpayers who fail to comply with the declaration requirement; however, this measure still requires parliamentary approval to be enacted into law. Another notable proposal suggests exemptions from capital gains tax for cryptocurrency payments made for goods and services when total payments do not exceed €1,000 in a tax year.

Separately, deliberations have been held on potential changes to how cryptocurrency conversions into fiat-backed stablecoins are taxed. On October 16, the National Assembly approved an amendment classifying certain conversions into these stablecoins as taxable transactions, contrasting existing regulations that permit exchanges between cryptocurrencies without immediate capital gains tax implications.

Previous stablecoin tax proposals have also emerged, including one amendment aimed at allowing crypto losses to offset gains across a 10-year period. However, these measures have not yet been established into law, and their final form is contingent upon the budget's passage through Parliament.

Pressure to Finalize Budget

With the ongoing delays, lawmakers are under pressure to finalize the government’s revenue proposals, as the National Assembly is required to wrap up its initial reading by midnight on November 17, as per the parliamentary schedule. If the revenue section faces rejection, any adopted amendments will not accompany the government’s draft to the Senate. The budget deliberations must advance through additional parliamentary scrutiny before any legislation can be enacted. The timeline has already been adjusted; as reported in Le Monde on October 19, the government postponed the earlier revenue vote due to the substantial number of amendments pending review.

An anonymous source affiliated with the minister in charge of parliamentary relations has emphasized the imperative for the government to provide a budget for France, aiming to reduce the public deficit to 5% of the gross domestic product. Prime Minister Sébastien Lecornu’s administration has recognized the challenges of meeting fiscal targets, as the proposed budget continues to face opposition from various political factions. The Assembly had a scheduled formal vote for the complete budget on November 17, while the constitutional deadline for finalizing the overall budget process is set for December 17.