Prop trading tax in France: how to declare your gains

Gains from an account funded by a prop firm are taxable in France from the first payout. They do not fall under the capital gains regime and its 30 % flat tax, contrary to a widespread belief: the funded trader disposes of no asset they hold. They receive consideration for a service, calculated on performance measured by the company paying them. In most situations these sums are analysed as bénéfices non commerciaux (non-commercial profits).

This article sets out the general framework and the questions to ask. It does not replace professional advice: the exact classification depends on the contract signed, on how regular the activity is, and on your personal situation, and getting the regime wrong is paid for in a tax adjustment.

Why it is not a capital gain on securities

The distinction rests on what you own.

When you buy a share or a currency pair on your own account, you hold an asset. Reselling it produces a capital gain, taxed as such. The flat tax applies to that category of income.

On a prop firm account, none of that exists. The capital is not yours, the positions are not opened in your name, and in almost every case the account is simulated. What you receive is not the proceeds of a disposal but a contractual share of profits, paid by a company in performance of a services contract.

That difference is not a subtlety of vocabulary: it changes the tax category, the applicable rate, the declaration obligations and the treatment of expenses.

Classification as non-commercial profits

BNC covers income from an independent activity that is neither commercial, nor artisanal, nor agricultural. Working as a funded trader, without subordination and paid on performance, generally attaches to it.

Two regimes coexist within that category.

Micro-BNC applies while annual receipts stay under a threshold set by the finance act. A flat allowance representing expenses is applied automatically, and you are taxed on the remainder. No real expense is deducted: not challenge fees, not resets, not your charting platform subscription.

Déclaration contrôlée becomes mandatory above the threshold, and remains available by election below it. It allows expenses actually incurred to be deducted, but requires proper accounting.

The trade-off between the two deserves a calculation, particularly if you have made repeated attempts: a trader who has paid several thousand euros in challenges and resets before their first payout may be better off under the actual-expenses regime, where the flat allowance would work against them.

Social levies and contributions

Social levies come on top of tax, with a base and rate depending on the regime chosen and on your status.

An activity carried on habitually and for profit may be regarded as professional, which entails affiliation to the self-employed regime and the payment of social contributions. An occasional activity is treated differently.

The boundary between the two is not defined by a single threshold but by a bundle of indicators: regularity, volume, share of your total income, resources deployed. That is exactly the kind of question that justifies a professional appointment rather than reading an article.

The auto-entrepreneur status

The micro-entrepreneur regime comes up often in trader communities. It offers real administrative simplicity and a possible flat-rate withholding.

Two points nonetheless call for care. First, the exact nature of the activity declared: it must correspond to what you actually do, and prop trading does not sit naturally in the existing classifications. Second, how it interacts with your other income, which can hold surprises for the overall calculation.

Here too, the answer depends on your situation. An employee receiving a few payouts a year and a trader living off them are not in the same position.

Obligations linked to being paid from abroad

Almost every prop firm is established outside France: the Czech Republic, the United Arab Emirates, the United Kingdom, the United States, Saint Lucia.

That changes nothing about your taxation. A French tax resident is taxable in France on all their income, whatever its geographical origin.

It can, however, create additional declaration obligations. Holding an account opened abroad is subject to a specific declaration, and receiving sums in crypto-assets — a frequent payment method in this industry — adds rules of its own.

What to keep

Whatever regime applies, build a file from the first euro containing: purchase receipts for every challenge and every reset, payout statements with their dates and amounts, the trader agreement signed with the firm, and statements from the bank account or wallet that received the funds.

Those documents serve two purposes: preparing your declaration, and justifying it in an audit. A trader who paid for fourteen challenges before passing one must be able to demonstrate it.

The question to put to your adviser

If you were to keep one formulation for your appointment, take this one: “I receive from a foreign company a contractual share of profits calculated on the performance of a simulated account I do not own, with no relationship of subordination. Which income category, which regime, and which declaration obligations?”

It describes the economic reality of the arrangement, which is what the tax authority reasons about — and it avoids the most common misunderstanding, that of the trader who talks about “trading gains” and gets an answer about capital gains on securities.