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

Understanding DeFi Yield Taxation in France

Decentralized Finance (DeFi) has revolutionized earning opportunities through yield farming, staking, and liquidity mining. In France, these crypto-generated yields are subject to taxation under specific regulations. The French Tax Authority (Direction Générale des Finances Publiques) treats most DeFi earnings as movable property income (Revenus de Capitaux Mobiliers) or capital gains, depending on transaction frequency and nature. Failure to properly declare can trigger audits and penalties of up to 80% of unpaid taxes. This guide clarifies France’s complex crypto tax landscape to help you remain compliant.

Step-by-Step Reporting Process for DeFi Earnings

1. Classify Your Yield Type: Determine if earnings qualify as interest (staking rewards), capital gains (token appreciation), or miscellaneous income (liquidity mining).
2. Calculate Annual Totals: Use blockchain explorers or tax software like Koinly or CoinTracking to aggregate all 2024 earnings across wallets and protocols.
3. Convert to Euros: Apply EUR values at the time of receipt using historical exchange rates from platforms like CoinGecko.
4. Complete Form 2042: Report under:
   • Box 3BN for staking/yield farming income
   • Box 3VG for capital gains from token sales
5. Submit by Deadline: File electronically via impots.gouv.fr before May-June 2025 (exact date TBA).

Tax Treatment of Different DeFi Yield Types

France applies distinct rules based on yield source:

• Staking Rewards: Taxed as movable capital income at 30% flat tax (Prélèvement Forfaitaire Unique).
• Liquidity Pool Earnings: Treated as capital gains if tokens appreciate; as miscellaneous income if received as stablecoins.
• Lending Protocol Interest: Subject to 30% flat tax upon withdrawal from platform.
• Airdrops & Forks: Taxable as non-commercial profits at income tax scales up to 45%.

Note: Frequent traders may be classified as professional taxpayers facing higher social charges.

Essential Record-Keeping Strategies

Maintain bulletproof documentation to withstand audits:

• Wallet addresses and transaction IDs for all yield receipts
• Dated screenshots of APY rates and protocol terms
• CSV exports from DeFi platforms (e.g., Uniswap, Aave)
• Proof of EUR conversion rates at transaction time
• Records of gas fees paid (deductible from gains)

Retain documents for 6 years as per French tax code Article L102 B.

Frequently Asked Questions (FAQ)

Are stablecoin yields taxed differently?

No. Yields paid in stablecoins like USDC follow the same 30% flat tax as crypto-denominated rewards. The conversion date to EUR determines valuation.

What if I use foreign exchanges?

French residents must declare worldwide income. Foreign platforms like Binance require specific reporting in Form 3916 alongside standard declarations.

Can losses offset DeFi taxes?

Yes. Capital losses from token sales can offset gains within the same tax year. Unused losses carry forward 10 years. Yield farming losses aren’t deductible.

Is there a tax-free threshold?

Only for occasional traders: Capital gains under €305/year are exempt. Yield farming/staking has no minimum threshold – all earnings are taxable.

Do I pay social charges?

The 30% flat tax includes 17.2% social charges (CSG/CRDS). Professional traders pay additional 15.5% social contributions.

How are wrapped assets taxed?

Wrapping/unwrapping (e.g., ETH to wETH) isn’t taxable. Taxes apply only upon yield receipt or asset disposal.

Disclaimer: This guide provides general information, not personalized tax advice. Consult a French crypto tax specialist for case-specific guidance.