Different world jurisdictions have had to choose either to regulate, ban or ignore the growth of cryptocurrencies and ICOs within their territory. France has finally chosen to regulate ICOs but on the condition that startups will have to pay taxes on money made from their crypto ventures.
This stance was revealed in a Reuters report last week and could prove to be a headway for ICOs and other crypto-related businesses to thrive within the country and beyond.
French regulators say they are willing to issue compliant firms with certificates and add that having such as approval will only bode well for the startups. For one thing, it would guarantee investor confidence in their projects and allow them to set up branches within the country.
The new draft rule will confer on French regulators the power to screen the team behind an ICO and also ensure that the startup has enough capital to pay back investors if their project fails to materialize.
Anti-money laundering rules and KYC checks will also have to be carried out by the ICOs before receiving funding from investors.
ICOs In France Agree To Pay Taxes
ICO issuers will have to fulfill their part of the bargain by redeeming taxes for money that they generate during the offering.
But that should not be a problem according to Paul Allard, a CEO for one of the startups, Impak Finance. He said in the report,
“Our plan is to declare the money raised as revenue and pay taxes on the profits we will make on those revenues. Since we are not close to making any profit, it doesn’t really affect us”.
A member of the tax force set up by French regulators to draft the ICO rules also confirmed this and reckoned that “the (cryptocurrency) community is ready to pay taxes as long as they are not confiscatory.”
Grabbing A Share
According to Reuters, 15 ICOs have launched in France this year and raised roughly 89 million Euros.
With another 68 ICOs planning to go live shortly, putting regulations will allow the country to increase tax revenues from an industry that is yet to be acknowledged in some countries. It will be the perfect channel for the French government scoop its share from an already burgeoning ecosystem.
The new rules are expected to be released early next year before new ICOs begin to go live.