French politicians are considering taxing unrealized cryptocurrency capital gains, which might affect Bitcoin taxation.

Bitcoin and other cryptocurrencies would be considered “non-productive property,” along with idle real estate and yachts. A proposed "unproductive wealth tax," replacing the real estate wealth tax, would apply to them.

The French Senate debated the 2025 budget and proposed taxing bitcoin value gains even if the assets haven't been sold. This differs from the existing approach, which taxes cryptocurrencies only when gains are made, such as when assets are sold.

Senator Sylvie Vermeillet, the proposal's proponent, said it would tax cryptocurrencies like other wealth categories.

The Danish Tax Law Council suggested an inventory taxation mechanism for crypto asset unrealized profits and losses last month. The law seeks to streamline crypto asset taxes and remove unjust crypto investor taxation.

Senate discussion included a preliminary vote on the idea. The vote did not represent a final decision or agreement since only supportive senators were present. Before becoming legislation, the proposal must be approved by the French National Assembly.

For those unaware, unrealized gains are the enhanced worth of an unsold asset. The owner of Bitcoin who increases its value after acquisition but does not sell it pays no taxes on that growth. The proposed levy will tax paper gains even if the asset isn't converted to cash.

This issue occurs as governments worldwide struggle to regulate and tax cryptocurrency.

Crypto taxes only apply when assets are sold in the U.S. Berlin and Lisbon exclude long-term holdings from taxes or treat digital assets more leniently.

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