Tax on Bitcoin Profits

cnocbui

AndrewJRenko wrote: »

It's disgracefully low because it allows people to exploit the gap between CGT and income tax. There is no difference between mining bitcoin and any other part-time job, like delivering pizzas or driving a taxi. But because it is masked as an 'investment gain', the tax liability is significantly lower.

Why should mining bitcoin get a reduced tax rate from the lad who works a few extra shifts in the local pub?

WTF?

If you buy bitcoin and sell them for a profit, you are investing, not mining. If you are actually mining bitcoin, buying equipment, paying for considerable amounts of electricity, then you are running a small business, like operating a taxi. It's nothing like a part time job where you are working for someone and being paid wages.

nxbyveromdwjpg

AndrewJRenko wrote: »

It's disgracefully low because it allows people to exploit the gap between CGT and income tax. There is no difference between mining bitcoin and any other part-time job, like delivering pizzas or driving a taxi. But because it is masked as an 'investment gain', the tax liability is significantly lower.

Why should mining bitcoin get a reduced tax rate from the lad who works a few extra shifts in the local pub?

No one here is talking about mining.

cnocbui

barneystinson wrote: »

But that's irrelevant because you're not suggesting you'll evade your Irish taxes, right..?

Of course I am not suggesting I would be evading Irish taxes. The minute I set foot on foreign soil with the intent to start a new life there, the laws of Ireland no longer apply to me. I become subject to the laws of the country I arrive in and would abide by them, as I currently do with Irish laws, including all those relating to taxation. I would no longer be subject to any Irish laws or tax obligations. The three year CGT thing is only relevant if you return to Ireland within that period and become tax resident. Being a tourist, temporary visitor, is not being tax resident.

I would of course pay the CGT applicable in the country I arrived in. Turn this situation around. if someone arrives to live in Ireland, owning bitcoin they purchased while living in their country of origin, and then disposes of it for a healthy profit, do you think they would be legally obligated to pay the CGT to their previous country or to Revenue?

greenfield21

Is the €1270 an annual allowance?

cnocbui

Yes, but it's not cumulative.

barneystinson

cnocbui wrote: »

Of course I am not suggesting I would be evading Irish taxes. The minute I set foot on foreign soil with the intent to start a new life there, the laws of Ireland no longer apply to me. I become subject to the laws of the country I arrive in and would abide by them, as I currently do with Irish laws, including all those relating to taxation. I would no longer be subject to any Irish laws or tax obligations. The three year CGT thing is only relevant if you return to Ireland within that period and become tax resident. Being a tourist, temporary visitor, is not being tax resident.

Have you a basis for this belief, other than your own wishful thinking?

Under Irish tax law, you remain ordinarily resident (and exposed to Irish CGT on your worldwide gains) for several years after ceasing to be resident. How effectively they can pursue a tax debt if you choose not to comply with your obligations is a separate matter from whether you actually have an obligation (and whether you choose to ignore/evade that obligation).

cnocbui

barneystinson wrote: »

Have you a basis for this belief, other than your own wishful thinking?

Under Irish tax law, you remain ordinarily resident (and exposed to Irish CGT on your worldwide gains) for several years after ceasing to be resident. How effectively they can pursue a tax debt if you choose not to comply with your obligations is a separate matter from whether you actually have an obligation (and whether you choose to ignore/evade that obligation).

You actually believe that? Lol!

In the case of an individual who is resident or ordinarily resident but not domiciled in the State, gains realised on
disposals of assets situated outside the State are liable to tax only to the extent that they are remitted to this country.
Such gains are not chargeable to tax until so remitted...

What is Domicile?
Domicile
is a concept of general law. It is broadly interpreted as meaning residence in a particular country with the
intention of residing permanently in that country. Every individual acquires a domicile of origin at birth. An Irish domicile
of origin will remain with an individual until such time as a new domicile of choice is acquired. However, before that
domicile of origin can be shed there has to be clear evidence that the individual has demonstrated a positive intention
of permanent residence in the new country and has abandoned the idea of ever returning to live in Ireland.
An
individual’s domicile status can influence the extent to which foreign sourced gains are taxable in Ireland.

CIARAN_BOYLE

cnocbui wrote: »

You actually believe that? Lol!

A change of domicile is very difficult to prove.

barneystinson

cnocbui wrote: »

You actually believe that? Lol!

I had assumed with a username like cnocbui you are Irish? If so, good luck changing your domicile quickly or easily.

ZeroThreat

CIARAN_BOYLE wrote: »

A change of domicile is very difficult to prove.

Is that how The Malteeser avoided paying tax here?

makeorbrake

barneystinson wrote: »

I had assumed with a username like cnocbui you are Irish? If so, good luck changing your domicile quickly or easily.

If he intends to leave permanently, then where's the problem?

cnocbui

CIARAN_BOYLE wrote: »

A change of domicile is very difficult to prove.

Here is the solicitor's letter confirming the sale of my house, here is the invoice from the removalists.

barneystinson wrote: »

I had assumed with a username like cnocbui you are Irish? If so, good luck changing your domicile quickly or easily.

I'm only Irish to the extent I have an Irish passport. I have dual nationality and will have not the slightest problem relocating.

barneystinson

makeorbrake wrote: »

If he intends to leave permanently, then where's the problem?

The body of case law, stretching back over a hundred years, that indicates it isn't straightforward to abandon one's domicile of origin and establish a domicile of choice.

makeorbrake

barneystinson wrote: »

The body of case law, stretching back over a hundred years, that indicates it isn't straightforward to abandon one's domicile of origin and establish a domicile of choice.

Sounds plain wrong then! If you've immigrated, you've immigrated. Have you not already quoted the relevant text from revenue? Ie. No more that 183 days and you're not resident in Ireland in that year; 3 years overseas and you are NOT 'ordinarily resident' in ROI. What am I missing?

CIARAN_BOYLE

makeorbrake wrote: »

Sounds plain wrong then! If you've immigrated, you've immigrated. Have you not already quoted the relevant text from revenue? Ie. No more that 183 days and you're not resident in Ireland in that year; 3 years overseas and you are NOT 'ordinarily resident' in ROI. What am I missing?

Because he is talking about being ordinary resident but not domiciled and therefore outside the scope of Irish cgt on day one when he emigrates.

Choc Chip

makeorbrake wrote: »

barneystinson wrote: »

The body of case law, stretching back over a hundred years, that indicates it isn't straightforward to abandon one's domicile of origin and establish a domicile of choice.

Sounds plain wrong then! If you've immigrated, you've immigrated. Have you not already quoted the relevant text from revenue? Ie. No more that 183 days and you're not resident in Ireland in that year; 3 years overseas and you are NOT 'ordinarily resident' in ROI. What am I missing?

Those are the rules for residency. Domicile is a different, more permanent concept and it is much harder to effect a change in your domicile.

After a couple of large cases where people successfully evaded tax on huge gains by becoming non-res, there's also a healthy chunk of anti-avoidance legislation to contend with.

Choc Chip

makeorbrake wrote: »

barneystinson wrote: »

The body of case law, stretching back over a hundred years, that indicates it isn't straightforward to abandon one's domicile of origin and establish a domicile of choice.

Sounds plain wrong then! If you've immigrated, you've immigrated. Have you not already quoted the relevant text from revenue? Ie. No more that 183 days and you're not resident in Ireland in that year; 3 years overseas and you are NOT 'ordinarily resident' in ROI. What am I missing?

Those are the rules for residency. Domicile is a different, more permanent concept and it is much harder to effect a change in your domicile.

After a couple of large cases where people successfully evaded tax on huge gains by becoming non-res, there's also a healthy chunk of anti-avoidance legislation to contend with.

cnocbui

Do people not understand the concept of 'legal jurisdiction'? Ireland does not have legal jurisdiction over anyone living in a foreign country. If you permanently move to another country - something I have some experience with, having done it twice - you become subject to the laws of the country you have moved to, and that most definitely includes taxation matters.

If you realise a capital gain in the country you have permanently moved to, you owe the tax on it to the country who's legal jurisdiction governs you, and that most definitely ceases to be Ireland the minute the plane leaves Irish air-space.

You can't move to the US and tell the IRS, 'sorry, I'm not going to pay CGT to you because the Irish government thinks it has dibs on that!' Try it and see what happens to you.

Irish tax laws do not take precedence over those of other countries - period - end of - that is not how things work. If you move to the US and don't pay CGT, the Guards are not going to come knocking on your door, but the local cops might.

You don't have to prove a change of domicile to Revenue, because they don't have legal jurisdiction. The question simply does not and will not arise, unless you return to Ireland as a resident.

dxhound2005

I wouldn't worry too much about moving. For no good reason whatsoever this invented "currency" went from being worth very little to being worth a fortune in a short space of time. This time next month or this time next year it might be back to being worth very little.

https://www.coindesk.com/price/

barneystinson

cnocbui wrote: »

Do people not understand the concept of 'legal jurisdiction'? Ireland does not have legal jurisdiction over anyone living in a foreign country. If you permanently move to another country - something I have some experience with, having done it twice - you become subject to the laws of the country you have moved to, and that most definitely includes taxation matters.

If you realise a capital gain in the country you have permanently moved to, you owe the tax on it to the country who's legal jurisdiction governs you, and that most definitely ceases to be Ireland the minute the plane leaves Irish air-space.

You can't move to the US and tell the IRS, 'sorry, I'm not going to pay CGT to you because the Irish government thinks it has dibs on that!' Try it and see what happens to you.

Irish tax laws do not take precedence over those of other countries - period - end of - that is not how things work. If you move to the US and don't pay CGT, the Guards are not going to come knocking on your door, but the local cops might.

You don't have to prove a change of domicile to Revenue, because they don't have legal jurisdiction. The question simply does not and will not arise, unless you return to Ireland as a resident.

You're hilarious.

Irish tax law states what it states. Do you refute that an Irish domiciled person (as defined by Irish law), who is non resident but still ordinarily resident is chargeable to Irish CGT on their worldwide gains? (Hint: You shouldn't, because it's in the Taxes Consolidation Act in black & white.)

I don't understand your point about jurisdiction. Irish revenue can raise a tax assessment on you which is valid and legally enforceable in Ireland. Now obviously, if you are not physically in Ireland and have no assets or income here, and can ensure that you never will again, then you can happily choose to ignore that fact. But it remains a fact that you are liable in Ireland to the tax on your gains.

AndrewJRenko

ZeroThreat wrote: »

Is that how The Malteeser avoided paying tax here?

I'd guess that having a very expensive team of the best tax lawyers working on his case could have been a factor too.

makeorbrake

dxhound2005 wrote: »

I wouldn't worry too much about moving. For no good reason whatsoever this invented "currency" went from being worth very little to being worth a fortune in a short space of time. This time next month or this time next year it might be back to being worth very little.

https://www.coindesk.com/price/

It could but as it stands today, Im in life changing territory. By the time I get my ducks in a row, it could have gone back to 1k Or it could be 2x what it is now.


If its ok with you, i'm going to plan on doing something about it.

barneystinson wrote:

But it remains a fact that you are liable in Ireland to the tax on your gains.

How is that possible if the gain was made in another jurisdiction?

barneystinson wrote:

Do you refute that an Irish domiciled person (as defined by Irish law), who is non resident but still ordinarily resident is chargeable to Irish CGT on their worldwide gains? (Hint: You shouldn't, because it's in the Taxes Consolidation Act in black & white.)

I thought he was talking in terms of being ordinarily resident? I thought it had already been pointed out that to be ordinarily resident, you had to be 3 years out of the country. If you spend 3 years out of the country and are ordinarily resident elsewhere, what right does the irish government have to any gains made during those three years?

barneystinson

makeorbrake wrote: »

I thought it had already been pointed out that to be ordinarily resident, you had to be 3 years out of the country. If you spend 3 years out of the country and are ordinarily resident elsewhere, what right does the irish government have to any gains made during those three years?

I'm lost. Irish tax legislation says Ireland taxes the gains of its ordinary residents. Do you not understand this? Or do you understand this, but want someone to get into constitutional law and international law to give you an answer..?

makeorbrake

barneystinson wrote: »

I'm lost. Irish tax legislation says Ireland taxes the gains of its ordinary residents. Do you not understand this? Or do you understand this, but want someone to get into constitutional law and international law to give you an answer..?

I dont understand and i'm looking for clarification. Was it not said earlier in the thread that it wasnt a simple matter of being tax resident in another jurisdiction for a given tax year - you had to be 'ordinarily resident' for 3 years (ie. that you would be classed as ordinarily resident in that jurisdiction if you lived there for 3 years). My question is this;

If you're tax resident and ordinarily resident in another jurisdiction for three years, is that not the end of the matter? i.e. whatever happens in that 3 years is between you and the country you moved to. Revenue in Ireland have no claim to any gains realised during that time.

Is this not the case?

Bubbaclaus

cnocbui wrote: »

Do people not understand the concept of 'legal jurisdiction'? Ireland does not have legal jurisdiction over anyone living in a foreign country. If you permanently move to another country - something I have some experience with, having done it twice - you become subject to the laws of the country you have moved to, and that most definitely includes taxation matters.

If you realise a capital gain in the country you have permanently moved to, you owe the tax on it to the country who's legal jurisdiction governs you, and that most definitely ceases to be Ireland the minute the plane leaves Irish air-space.

You can't move to the US and tell the IRS, 'sorry, I'm not going to pay CGT to you because the Irish government thinks it has dibs on that!' Try it and see what happens to you.

Irish tax laws do not take precedence over those of other countries - period - end of - that is not how things work. If you move to the US and don't pay CGT, the Guards are not going to come knocking on your door, but the local cops might.

You don't have to prove a change of domicile to Revenue, because they don't have legal jurisdiction. The question simply does not and will not arise, unless you return to Ireland as a resident.

This is the most incorrect statement I've ever read on boards. If anyone uses this as advice for their own personal situation then may god have mercy on your soul.

nxbyveromdwjpg

It seems to be like this - the Irish revenue want 33% of all of your gains even if you have moved country, got nothing from them or Ireland in the way of services in years, are not resident in Ireland, and none of the gains have anything to do with Ireland, were not in made Ireland and never passed through Ireland at all.

Even if you pay the CGT in the country which you are based, and where the gains were made, the Irish revenue still will want the balance up to 33% of the total gains.

With a system like that in place, full on evasion almost starts to look noble in comparison.

I would definitely consider it worth it if the amount is large, to make somewhere more tax hospitable my permanent home for 3 years and a day before cashing out, to ensure they get nothing.

Tigger

Itzel Careful Treasure wrote: »

It seems to be like this - the Irish revenue want 33% of all of your gains even if you have moved country, got nothing from them or Ireland in the way of services in years, are not resident in Ireland, and none of the gains have anything to do with Ireland, were not in made Ireland and never passed through Ireland at all.

Even if you pay the CGT in the country which you are based, and where the gains were made, the Irish revenue still will want the balance up to 33% of the total gains.

With a system like that in place, full on evasion almost starts to look noble in comparison.

I would definitely consider it worth it if the amount is large, to make somewhere more tax hospitable my permanent home for 3 years and a day before cashing out, to ensure they get nothing.

will btc still be as high in three years and a day?

barneystinson

makeorbrake wrote: »

I dont understand and i'm looking for clarification. Was it not said earlier in the thread that it wasnt a simple matter of being tax resident in another jurisdiction for a given tax year - you had to be 'ordinarily resident' for 3 years (ie. that you would be classed as ordinarily resident in that jurisdiction if you lived there for 3 years). My question is this;

If you're tax resident and ordinarily resident in another jurisdiction for three years, is that not the end of the matter? i.e. whatever happens in that 3 years is between you and the country you moved to. Revenue in Ireland have no claim to any gains realised during that time.

Is this not the case?

In a word, no.

Once you're into your 4th year gone, any gains you make FROM THEN ON are outside of the scope of Irish tax.

Gains you make DURING the 3 years that you remain ordinarily resident but non-resident, are within the scope of Irish tax. It doesn't matter where you are, or whether you don't stay in any one place for more than a week.

This isn't complicated, as tax goes.

makeorbrake

barneystinson wrote: »

In a word, no.
Once you're into your 4th year gone, any gains you make FROM THEN ON are outside of the scope of Irish tax.

Ok, thanks for clarifying.

tigger wrote:

will btc still be as high in three years and a day?

It would be risky in the short term but worth the punt. Now that I understand that its 3 years and 1 day, that's a whole different ball game. May look into tether...possibly a solution....but can it be trusted...

Either that or the decision is to burn bridges....

cnocbui

Bubbaclaus wrote: »

This is the most incorrect statement I've ever read on boards. If anyone uses this as advice for their own personal situation then may god have mercy on your soul.

I believe what I have said to be true. What is the basis for you thinking I am wrong? Got any links or references?

Do tell what you think will happen, when I have emigrated, realised a capital gain, paid the appropriate CGT in the new country, where I will be permanently domiciled, but don't pay any CGT to Revenue?