Deducting Crypto Losses in France: What Actually Works

French crypto taxation is unusually forgiving in one respect and unusually strict in another, and both features hit losses. The forgiving part is that crypto to crypto exchanges are not taxable. The strict part is that this cuts both ways: an exchange that is not a taxable gain is also not a deductible loss.

The feature that defines everything

For private investors, a taxable event only arises when you convert crypto into euros or another fiat currency, spend crypto on goods or services, or receive crypto as income. Crypto to crypto exchanges are not taxable, and neither is simply buying or holding. That is what distinguishes France from most of Europe.

Now read it from the loss side. Rotating from a collapsing token into a stablecoin, which feels like crystallising the loss, realises nothing for French tax purposes. You have moved between digital assets. The loss is still unrealised, and unrealised losses are not deductible.

This is the single most important thing for a French investor to understand about a bad year: the defensive move that felt like locking in the loss did not create anything you can use.

The global portfolio method changes the shape of a loss

France does not use simple FIFO. It applies a proportional method across the whole portfolio of digital assets, where each disposal is computed against the total acquisition price of the entire portfolio and its value.

The consequence is that you cannot select a losing position and dispose of it to generate a loss. Every disposal is measured against a portfolio-wide figure, so what you realise is a proportion of the whole rather than the result of a specific lot. That makes deliberate loss harvesting much harder here than in a jurisdiction with per lot identification.

The 305 euro threshold works in both directions

If your total annual disposals are 305 euros or less, gains are exempt. That is helpful in a small year, but note that it is a threshold on disposals rather than on gains, and an exemption is not a loss regime.

What the rate tells you about the value of a loss

A taxable disposal is subject to the flat tax, the prelevement forfaitaire unique, at 30% on 2025 gains, comprising 12.8% income tax and 17.2% social levies. For 2026 the social levy share increased, taking the overall rate to approximately 31.4%, so verify the rate applicable to your tax year. You may opt for the progressive income tax scale instead of the 12.8% component if your bracket is more favourable, with the social levies still due.

A loss is worth whatever it shelters, so the value of an unused loss depends on the rate in the year it is used, which is a reason to confirm the carry forward rules with the DGFiP or an adviser rather than assume them.

Formulaire 2086 is where losses become real

Disposals are declared on Formulaire 2086, with each disposal listed, and the result carried to Formulaire 2042 C. The listing requirement is the operative point: a loss you did not declare in its year is not sitting somewhere for you, and a year of net losses is exactly the year people skip because nothing appears to be owed.

What to do

1. Realise, if you intend to. Only a conversion to fiat or a spend is a taxable disposal. A swap into a stablecoin is not.
2. Declare the year even when it is negative, listing each disposal on Formulaire 2086.
3. Track the whole portfolio, because the proportional method needs total acquisition price and total value, not just the lot you sold.
4. Confirm the carry forward rules with the DGFiP or a conseiller fiscal before planning around them.
5. Check whether you are a private investor at all. Professional activity and mining fall under the BNC regime at the progressive scale up to 45%, where the loss rules are different.

Our Formulaire 2086 guide covers the declaration, and French crypto tax covers the framework.

General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.