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

Introduction: Navigating DeFi Taxes in France

As decentralized finance (DeFi) transforms how we earn crypto yields, French taxpayers face complex reporting requirements. Whether you’re staking tokens, providing liquidity, or yield farming, understanding how to report DeFi yield in France is crucial to avoid penalties. This comprehensive guide breaks down France’s tax framework for DeFi income, with actionable steps to ensure compliance.

Understanding DeFi Yield and French Tax Classification

DeFi yield refers to rewards earned through decentralized protocols like liquidity pools, lending platforms, or staking. Under French tax law:

• Regular yield (e.g., staking rewards) is taxed as revenus de capitaux mobiliers (movable capital income) at a flat 30% rate
• Capital gains from selling appreciated crypto assets fall under the plus-values regime with a 30% flat tax
• Exceptional profits from high-frequency trading may qualify as professional income, subject to progressive rates up to 45%

Step-by-Step Guide to Reporting DeFi Yield

1. Track All Transactions: Use tools like Koinly or CoinTracking to log every yield event with dates, amounts, and EUR values at receipt
2. Convert to Euros: Calculate yield value using exchange rates at the moment of receipt (daily ECB reference rates)
3. Complete Form 2086: Report total annual yield in Section 2BN (Revenus des crypto-actifs)
4. File Capital Gains Separately: Use Form 2086 for gains realized upon selling yield-generated assets
5. Submit by Deadline: Electronically file via impots.gouv.fr before May-June following the tax year

Required Documentation for Tax Reporting

Prepare these records to support your declaration:

• CSV exports from DeFi platforms (Uniswap, Aave, etc.)
• Wallet transaction histories with timestamps
• Proof of EUR conversion rates (screenshots from ECB or reputable exchanges)
• Receipts for any associated gas fees (deductible from gains)

Common Reporting Mistakes to Avoid

• Mixing Yield and Principal: Never report initial deposits as income – only newly generated tokens
• Ignoring Small Amounts: All yield must be reported regardless of value (no minimum threshold)
• Forgetting Airdrops: Free tokens distributed to holders qualify as taxable income
• Misclassifying Income: Distinguish between yield (30% flat tax) and capital gains (separate 30% calculation)

Calculating Your Taxable DeFi Yield

Example: You received 0.5 ETH in staking rewards on July 15 when 1 ETH = €1,800. Simultaneously, you earned 200 USDC from a liquidity pool when 1 USDC = €0.95.

1. ETH Yield: 0.5 × €1,800 = €900
2. USDC Yield: 200 × €0.95 = €190
3. Total Taxable Yield: €1,090
4. Tax Due (30%): €327

Frequently Asked Questions (FAQ)

Q: Are stablecoin yields taxed differently in France?
A: No – all DeFi yields follow the same 30% flat tax regardless of token type.

Q: Can I deduct DeFi platform fees?
A: Yes – transaction/gas fees directly related to yield generation are deductible from your taxable amount.

Q: What if I hold yield in crypto without converting to euros?
A: You still owe tax based on EUR value at receipt. Conversion happens only for valuation, not actual disposal.

Q: How does France treat impermanent loss for tax purposes?
A: Losses from liquidity pool withdrawals are deductible against capital gains but don’t offset yield income.

Q: Is there a tax exemption for small DeFi earnings?
A: Unlike some EU countries, France has no minimum threshold – all yield must be declared.

Conclusion: Staying Compliant in 2024

With France’s tax authority (DGFiP) increasing crypto audits, accurate DeFi yield reporting is essential. By meticulously tracking rewards, separating income types, and filing Form 2086 correctly, you can avoid penalties up to 40% of undeclared amounts. Consult a French crypto tax specialist for complex portfolios, and always retain records for six years post-filing.