Prop firm payouts and tax: France, Belgium, Canada

Why they aren't capital gains

At most prop firms the funded account is simulated: you don't trade your own money, and a payout is a sum the firm pays you based on your results. That's why commentators generally treat it as pay for an activity, not as a gain on investments. Capital gains rules (France's flat tax, Belgium's exemption, Canada's 50% inclusion) therefore don't normally apply.

France

The most common reading classes payouts as non-commercial profits (BNC). As far as we know, the tax authority has no official position specific to prop firms.

• Micro-BNC: if your receipts stay under the annual ceiling (€77,700 for 2023 to 2025 income; check the current one), you declare the gross amount and a flat 34% allowance is applied. Actual costs (challenges, subscriptions) can't be deducted on top.
• Declared-profit regime: actual profit, deductible costs (failed challenges included), bookkeeping and form 2035. Worth it if your costs exceed 34% of receipts.
• BNC income also carries social contributions. A regular activity generally means registering (for example as a micro-entrepreneur).
• Foreign accounts that receive your payouts (Wise, Rise, Payoneer…) must be declared every year on form 3916, and crypto accounts on 3916-bis.

Belgium

Belgian law doesn't settle it. According to a tax lawyer's analysis (see sources), the most likely reading is a provision of services, which gives:

• miscellaneous income (occasional profits) for a one-off activity, taxed at a separate rate;
• professional income if the activity is regular and organised, taxed at progressive rates, with costs deductible and self-employed social contributions due.

Where the line falls depends on how intense the activity is. Treating payouts as tax-free gambling winnings is seen as theoretical: no court has accepted it.

Canada

• Payouts are generally treated as business income, 100% taxable, not as capital gains.
• They're reported as self-employment income (form T2125, plus TP-80 in Quebec), with expenses incurred to earn that income, such as challenge fees, deductible.
• As a self-employed person, you pay both halves of CPP (or QPP in Quebec) contributions.

Wherever you live

• Keep your challenge invoices, payout statements and currency conversion records.
• Payouts received in crypto must be declared too, at their value when received.
• Have an accountant or tax adviser in your country confirm your situation, especially above a few thousand a year.