The gains made on the foreign exchange market, as well as any income, moreover, are subject to tax on the income of French. When your annual return, it will be necessary to mention all of the amounts collected through this activity. How to do it ? This is what we will see today.
The tax rate applied to income from trading depends on several factors :
— The country of residence of the trader,
— The country in which is housed his trading account,
— The percentage that the trading represents in its total income, more or less 50%.
Specifically, if you are French resident, that you have a trading account based in France, and that the trading is your main activity, then the tax administration will treat you as a professional. It you rank in the scheme of non-commercial profits (BNC) and you will apply a progressive scale. At the maximum, your tax rate can reach 54% with, in addition, 12.3% of social contributions.
If on the other hand, the forex trading represents a minority share of your income then you will be considered an operator of casual and a flat-rate scheme will be applied. The tax rate for this category is 18% on the capital gains. Add to that 12.1% of social contributions.
If you are French resident, but your trading account is abroad, the legislation becomes different. You will be required to declare to the French tax administration this situation. Otherwise, you are liable to a fine of up to € 5 000. Have a trading account in a foreign country may bring benefits, but it also has disadvantages. Capital gains are, in effect, taxed at the level of the marginal tax rate on income, and you must always add the social security contributions. In addition to this, the losses can be declared only on six years and not ten as for holders of a trading account based in France. If you find yourself in this situation, note that it will also need to worry about the tax laws of the country in which is hosted in your account to check, for example, that he does not practice double taxation.
If, despite our clarification of the day, you still have questions, do not hesitate to contact your tax office.