NFT TAXATION: What are the tax obligations ?
Updated over a week ago

In recent years, NFTs have taken root in many sectors, such as video games and art. The technological advantage of NFTs is to guarantee the authenticity of a digital good through the blockchain. Thanks to them, no more copycats.

A true digital revolution, it turns out, however, that the taxation of these assets is still too little known to its owners. So, should you declare your NFTs during your 2022 tax return? If yes, how ?

What is an NFT?

The NFT is not just a simple JPG. No, obviously, it's much more complicated than that...

Image de NFT soumis à la fiscalité. Nom du NFT Bored Ape.

Exemple of NFT (Bored Ape)

NFTs or “non-fungible tokens” are unique digital assets based on the blockchain. They are called “non-fungible” because they cannot be exchanged for another good of the same value. Just like a work of art or real estate, they are unique and have specific characteristics.

For example: it is complicated to exchange one house for another due to their very distinct characteristics.

Conversely, fungible assets such as money, cryptocurrencies or even stock market shares are interchangeable. In particular, you can exchange a 10 euro note for another. An NFT holder is guaranteed to preserve exclusive ownership of their asset thanks to the blockchain. This provides proof of certificate of authenticity.

Is the NFT subject to taxation?

Yes, the NFT is subject to taxation, like all crypto-assets. You must declare your taxable transactions of: staking, play2earn, derivative products, donations and so on... but also your NFTs if you consider that it is a crypto-asset.

Taxable transactions include exchanges of cryptoassets for fiat currencies, goods or services, as well as transactions of NFTs for fiat, services, or goods. Indeed, NFTs are not subject to taxation when exchanged for other cryptocurrencies.

However, they become taxable once the cryptocurrency is converted into fiat currency during a subsequent sale. To find out everything about the taxation of NFTs, follow our advice and stay informed to optimize your transactions while respecting the tax regulations in force.

Like any other source of assets, the NFT is therefore subject to tax. Depending on the tax regime applied, the way of taxing is different. Let’s therefore review all the possible applicable regimes on NFTs.

What taxation applies to NFTs?

NFTs respond to many very different issues depending on their nature. Given the broad spectrum of its assets, it is complicated to precisely define a tax regime applicable to them as a whole.

Pending a clear classification by the tax administration, here are the different applicable regimes:

– The capital gains regime on digital assets.
– The regime for works of art or objects.
– The transfer tax regime on movable property.


👉 Option 1: The capital gains regime on digital assets

The first option is that the NFT would be treated as a digital asset, like a cryptocurrency. It would therefore be subject to the regime of capital gains on digital assets.

As a reminder: the regime for capital gains on digital assets is subject to flat tax, a single flat-rate levy (PFU) at a rate of 30%.

There are two taxable events:

– The transfer of a digital asset against a state monetary currency.
– Payment for a good or service in digital assets.

Example :

John buys 2ETH for 2000 euros. He then buys an NFT for 1ETH.

A few weeks later, he sold his NFT for 1,200 euros.

His remaining ETH is now worth, in fiat equivalent, 3000 euros.

Details of the formula: transfer price - ((total acquisition price) x transfer price) / overall portfolio value.)

1200 - ((2000) X 1200) / 3000) = 400 euros of gains.

30% of 400 = 120 euros.

John will therefore have received a taxable transfer and will be liable for 83 euros in tax.

At Waltio, we consider, in our tool, the NFT as a digital asset for legal and technical reasons.

To calculate and declare your NFTs with complete peace of mind -> Waltio.

👉 Option 2: The regime for works of art or objects.

The second option is to consider the NFT as a work of art. In this scenario, a choice is offered to the declarant:

  • Tax the transfer at a rate of 6.5%.

  • Tax the capital gain earned at a rate of 36.2%.

Please note: it is important to note that in this option, the purchase of NFTs through a cryptocurrency would become taxable. Indeed, the NFT is no longer considered a digital asset, the conversion of a crypto against this NFT would generate a taxable event. (According to the capital gains regime on digital assets seen above)

👉 Option 3: The transfer tax regime on movable property.

Finally, failing to be able to receive a specific qualification, the NFT could be assimilated to movable property and be subject to the tax regime for transfer on movable property (150 AU of the CGI).

The capital gain realized would here be subject to taxation at a rate of 36.2% with a reduction of 5% per year of holding after two years.

Transfers of less than or equal to 5,000 euros are exempt.

In short, yes, the NFT is in all cases a taxable asset in the same way as your cryptocurrencies. In order to be in compliance with the tax administration, it must be declared under one of the regimes mentioned.

  • Tax regime for capital gains on digital assets.

  • Regime for works of art or objects.

  • Tax regime for transfer of movable property.

At Waltio, we consider that the NFT is a digital asset and that it must therefore be subject to the regime of capital gains on digital assets.

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If you have any further questions, don't hesitate to contact us via the chat just at the bottom right of your screen! 💬

The Waltio team

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