How to Report DeFi Yield in France: Your Complete 2024 Tax Guide

Understanding DeFi Yield and French Tax Obligations

Decentralized Finance (DeFi) has revolutionized earning opportunities through crypto staking, liquidity mining, and lending protocols. But for French residents, these lucrative yields come with tax responsibilities. Under French law, all cryptocurrency earnings—including DeFi rewards—are considered taxable income. Failure to properly report can trigger audits, penalties of up to 80% of owed taxes, or even criminal charges. This guide breaks down exactly how to declare DeFi earnings while complying with France’s strict tax framework.

How France Taxes DeFi Earnings: Capital Gains vs. Miscellaneous Income

French tax authorities categorize DeFi yields based on activity type:

• Capital Gains Tax (Plus-value): Applies when selling crypto assets acquired via DeFi rewards. Subject to 30% flat tax (PFU) comprising 12.8% income tax + 17.2% social contributions.
• Miscellaneous Income (BNC): Most DeFi rewards (staking, liquidity mining) are taxed as non-commercial profits upon receipt. Added to your income tax bracket (up to 45%) + 17.2% social charges.
• Exceptions: Professional traders may qualify for BIC regime. Always consult a tax advisor for complex cases.

Step-by-Step Guide to Reporting DeFi Yield

1. Track All Transactions: Use tools like Koinly or Accointing to log every reward date, amount in crypto, and EUR value at receipt (based on market price).
2. Calculate Taxable Value: Convert rewards to EUR using exchange rates on the day received. Example: 0.5 ETH earned via staking on Jan 5 when ETH=€2,000 = €1,000 taxable income.
3. Complete Form 2042 C: Report total miscellaneous income (BNC) from DeFi in Section “Revenus non salariés” under code BNC.
4. Declare Capital Gains: When selling rewarded tokens, file gains/losses via Form 2086. Subtract acquisition cost (€0 for rewards) from sale price.
5. Submit by Deadline: Electronically file via impots.gouv.fr before May-June (exact date varies yearly).

Top 5 Reporting Mistakes to Avoid

• ❌ Ignoring small rewards: All earnings must be reported, even under €50.
• ❌ Using incorrect valuation dates: Taxable value is set at receipt, not when tokens are sold.
• ❌ Mixing personal/professional wallets: Maintain separate accounts for clearer auditing.
• ❌ Omitting foreign platforms: French residents must declare global crypto income.
• ❌ Forgetting social charges: Remember the additional 17.2% CSG/CRDS contributions.

Essential Tools for French Crypto Tax Compliance

• Tax Software: Koinly (supports French tax forms), Cryptio, or CoinTracking with EUR integrations.
• Exchange Rate Sources: Historical data from CoinGecko or Binance.
• Official Resources: French Tax Authority’s Crypto Tax Guide (updated annually).
• Professional Help: Hire a expert-comptable specializing in crypto for complex portfolios.

FAQ: Reporting DeFi Yield in France

1. Are Uniswap LP rewards taxable in France?

Yes. Liquidity provider tokens and rewards are taxed as miscellaneous income (BNC) at market value when received. Subsequent token sales incur capital gains tax.

2. Do I pay tax if my DeFi rewards aren’t cashed to EUR?

Absolutely. Taxation occurs upon reward receipt in crypto, regardless of conversion to fiat. The euro value at that moment determines your tax base.

3. How does France treat yield from foreign DeFi platforms?

French residents must declare all worldwide crypto income. Foreign platform usage doesn’t exempt you—report earnings exactly as with French-based protocols.

4. Can I deduct DeFi transaction fees?

Yes. Gas fees and other direct costs for earning rewards are deductible from your taxable income. Keep detailed records of all transactions.

5. What if I held DeFi rewards long-term?

France has no reduced long-term capital gains rate for crypto. All sales are taxed at 30% PFU regardless of holding period.

Always verify with a tax professional, as regulations evolve. Proper reporting ensures you avoid penalties while legally maximizing your DeFi returns.