TBW - France: towards an unprecedented tax framework for governance tokens?

The debate on the taxation of crypto-assets has crept into the bill to establish a budget for France in 2026. Two amendments tabled by MPs Virginie Duby-Muller (Les Républicains) and Paul Midy (Renaissance) proposed creating a specific tax framework for governance tokens, crypto-assets giving voting or initiative rights over decentralised protocols.

The aim was to defer taxation on developers receiving these tokens as remuneration, to prevent them from being forced to sell them immediately.

But although they were due to be discussed at the National Assembly, the amendments were finally withdrawn at the request of Amélie de Montchalin, the French Minister for Public Accounts, so that more in-depth work could be carried out on the subject.

"This is a working process that we can launch with a great deal of confidence and obviously with the aim of achieving a successful outcome", she told the public session.

A strategic withdrawal rather than a rejection

In parliamentary practice, an amendment can be adopted, rejected, declared inadmissible... or withdrawn. The latter case often reflects the government's desire to reformulate a measure deemed relevant but technically imperfect.

"Our aim is to have the issue resolved within the framework of the current Finance Bill (PLF)," says Faustine Fleuret, in charge of public affairs for the Morpho protocol, which is mainly developed in France.

Discussions are now continuing between the tax authorities (DLF), the Treasury Directorate General and industry representatives. The aim is to find a consensual version by the time the Senate debates the issue, scheduled for the end of November, so that the measure can be incorporated into the final version of the 2026 Budget.

The principle: tax on disposal, not on allocation

The initial amendment proposed the creation of an Article 92 B in the General Tax Code, defining for the first time a specific regime for governance tokens. These assets, which make it possible to participate in the decisions of DeFi projects, are distinct from purely speculative crypto-assets.

The text provided for gains to be taxed only when the tokens are transferred, and not when they are allocated.

Let's take an example: a developer receives €1,000 in MORPHO tokens for his contribution to the protocol.

Today, he must immediately declare this sum as income, and pay almost 550 euros in tax and social security contributions (even though he has not yet sold his tokens).

Under the new system, taxation would be deferred: the developer would only pay when his tokens are resold, based on the price actually obtained. If the price of the tokens appreciates between now and the sale, the tax revenue would be higher.

This mechanism is intended to prevent forced sales and encourage long-term holdings, which are essential for the stability of decentralised projects.

A digital sovereignty issue

For the authors of the amendment, the current tax regime would drive many developers to relocate to other European countries such as Portugal or Switzerland, where the rules are more favourable. By making it easier to hold tokens in France, the measure would make it possible to preserve French participation in the governance of the major DeFi protocols and maintain skills in the country.

Governance tokens represent between 20 and 50 billion euros distributed each year worldwide. Their ownership by national players is seen as a strategic lever for digital sovereignty.

A potentially profitable measure

The scheme, presented as fiscally neutral in the short term by its authors, would be positive in the medium term. Once sales of tokens are completed, the expected return is estimated at between €150 and €300 million a year.

If adopted, this regime would constitute the first legal recognition of the economic role of governance tokens and an important step towards a tax system tailored to DeFi, an area still largely ignored by European tax frameworks.

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