French CDHR and crypto gains: securing exceptional income treatment with a tax ruling

A crypto-asset gain realised on a one-off basis, on assets held for many years, can in our view qualify as exceptional income (revenu exceptionnel) when calculating the CDHR (France’s minimum tax on high incomes), which applies to taxpayers domiciled in France for tax purposes. The gain is then taken into account for only a quarter of its amount, and the difference can reach tens of thousands of euros. The position is not settled, however: the French tax authorities have not expressly accepted it for crypto-assets, and their local offices do not all respond in the same way. A tax ruling (rescrit fiscal) makes it possible to secure it.

The CDHR in brief

Introduced by the Finance Act for 2025 and codified in Article 224 of the CGI, the CDHR applies to taxpayers domiciled in France for tax purposes whose reference income exceeds €250,000 for a single person and €500,000 for a couple filing jointly. It has applied since 2025 income and, under the Finance Act for 2026 (Law No. 2026-103 of 19 February 2026), will continue to apply until the year in which the French central government budget deficit falls back below 3% of GDP.

Its amount is the difference, where positive, between 20% of the reference income and the sum of income tax (including the 12.8% flat tax, prélèvement forfaitaire unique or PFU), the CEHR (contribution exceptionnelle sur les hauts revenus, the French exceptional contribution on high incomes) and certain withholding taxes that discharge income tax, increased by €1,500 per dependant and €12,500 for a couple. A relief (décote) applies up to a reference income of €330,000 (single person) or €660,000 (couple).

For high-income households, the mechanism therefore brings the flat tax towards an effective rate of 38.6%.

The contribution for a given year gives rise to an advance payment equal to 95% of the estimated contribution, payable between 1 and 15 December of that same year. An advance payment more than 20% below 95% of the contribution finally due triggers a 20% surcharge.

Why exceptional income treatment changes everything

Income which, by its nature, is not likely to be received annually, and whose amount exceeds the average net taxable income of the three previous years, receives special treatment (Article 224(II) CGI). Three effects combine:

• the gain is included for only a quarter in the reference income, both for the threshold test and for the calculation;
• the income tax relating to it is taken into account for only a quarter in the formula;
• the share of the CEHR relating to the gain is also taken into account for a quarter from 2026 income onwards; for 2025 income, it is taken in full.

This treatment does not change the income tax or the CEHR actually due: it only applies in calculating the CDHR. It is an option, exercised on the income tax return. It must not be confused with the quotient system (système du quotient) of Article 163-0 A CGI, reserved for income taxed at the progressive scale, which does not apply for the CDHR.

The simulator below runs this calculation for your own situation, including the advance payment and the risk of a surcharge.

Can a crypto-asset gain be exceptional income?

The amount condition

The gain, taken at its net taxable amount, must exceed the average net income on which the taxpayer was subject to income tax for the three previous years. For a large disposal, the condition is often met, provided the gain can be calculated precisely. Under the global portfolio method of Article 150 VH bis CGI, the total acquisition price of the entire portfolio must be documented.

The nature condition: what the guidance says, and what it does not

The administrative guidance published on 30 June 2026 (BOI-IR-CDHR-20) is the first on this notion. It accepts that income taxed at a proportional rate may be exceptional by nature (§ 30), refers to gains on securities taxed at 12.8% or at the progressive scale (§ 40), and treats as an indicator the absence of similar transactions in previous and subsequent years (§ 50).

It does not, however, mention gains on digital assets (actifs numériques), which are governed by a separate regime. Extending it to crypto-assets is defensible: Article 224 makes no distinction by category of income, and both regimes cover gains on the disposal of private assets taxed at the same rate. It is not settled, though, and the protection attached to published guidance (Article L. 80 A of the French Tax Procedures Code, LPF) cannot be relied on with certainty for a crypto-asset gain.

Case law offers some support. The Conseil d’État (France’s highest administrative court) accepted that a gain was exceptional even though the taxpayer had kept part of her shares, in the absence of evidence that the transaction was intended to recur regularly (CE, 23 Nov. 2020, No. 427778). No decision has yet ruled on the CDHR as applied to crypto-assets.

In the cases we have handled, some tax offices have accepted that the gain was exceptional; others have refused, including after a second review. The grounds for refusal we have encountered mainly concern:

• the intention, even a possible one, to sell other crypto-assets in the following years;
• exchanges between crypto-assets within the portfolio, which are not taxable but were presented as evidence of ongoing management;
• treating crypto-assets as an actively managed securities portfolio;
• insufficient evidence of the acquisition price and the amount of the gain.

Each of these grounds can be challenged. The outcome depends, however, on how the situation is presented and documented from the initial request onwards: transaction history, absence of comparable disposals in neighbouring years, reason for the disposal.

The December advance payment: a decision to take before 15 December

For a gain realised in 2026, the advance payment is calculated on an estimate of the year’s income, between 1 and 15 December 2026. Two approaches are possible:

• Apply the exceptional treatment from the advance payment onwards, and therefore pay a reduced or nil advance. If the treatment is later refused, the 20% surcharge applies. In the example above, it would reach €8,471, excluding late-payment interest.
• Pay a prudent advance, calculated without the exceptional treatment, then claim that treatment on the annual return. On our reading of the law, nothing prevents this. The excess is refunded if the treatment is accepted, but the cash is advanced until the refund.

The tax ruling: securing the treatment

The general tax ruling procedure of Article L. 80 B, 1° LPF makes it possible to ask the tax authorities about a specific situation. If they formally take a position, they can no longer challenge their assessment with respect to a taxpayer acting in good faith, as long as the situation described is complete, accurate and unchanged.

1. Preliminary analysis: history of acquisitions and disposals, exchanges between crypto-assets, management intentions, evidence of the acquisition price. This is the stage at which the chances of success are decided.
2. Ruling request: full statement of the facts and legal reasoning. The tax authorities in principle have three months to reply; their silence does not amount to approval.
3. Second review: if the reply is unfavourable, a new request can be made within two months to a collegiate panel (collège) (Article L. 80 CB LPF), before which the taxpayer and their lawyer may be heard.
4. After an unfavourable reply: the taxpayer may file according to their own analysis, at the risk of a reassessment that can be challenged before the tax courts. An action for annulment (recours pour excès de pouvoir) against the position taken is in principle not available, except where it has significant non-tax effects (CE, sect., 2 Dec. 2016, No. 387613).

Timing matters: a request filed in mid-October 2026 may receive a reply after the December advance payment. The ruling then secures the annual return, and the advance payment is decided separately. The earlier the request is filed after the disposal, the better.

This fee structure complies with French professional rules, which only allow a success fee in addition to a fixed fee, and aligns our interests with yours: if the request is refused, you bear only the fixed part. The amount is quoted after an initial analysis of your file.

Sources: French Tax Code (CGI), Articles 4 B, 150 VH bis, 163-0 A, 197, 200 C, 223 sexies and 224; Finance Act for 2025 (Law No. 2025-127 of 14 February 2025), Article 10; Finance Act for 2026 (Law No. 2026-103 of 19 February 2026), Article 2; French Tax Procedures Code (LPF), Articles L. 80 A, L. 80 B, 1°, and L. 80 CB; BOI-IR-CDHR-10, BOI-IR-CDHR-20 and BOI-IR-CDHR-30 of 30 June 2026; CE, 23 Nov. 2020, No. 427778; CE, sect., 2 Dec. 2016, No. 387613.