Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

ZeroThreat

Noctifer wrote: »

I have all my trades, but I have no way of knowing how much was LTC or ETH worth the moment I traded it for BTC. There is not way you can get correct information on this since the price in a single minute can change multiple times.

According to Peregrinus above, the records generated by the exchanges will give you the (real) currency values at time of trade, no?

Noctifer

ZeroThreat wrote: »

According to Peregrinus above, the records generated by the exchanges will give you the (real) currency values at time of trade, no?

They would for the BTC to EUR trade, for the LTC to BTC trade all I would get is info of how much BTC I would get for that LTC. However, because the price can be quite volatile I would have no idea what the price of LTC was the moment I sold it for BTC.

The BTC/LTC exchange is a different entity from the LTC/EUR exchange.

Fakent.ie

ZeroThreat wrote: »

It's up to every citizen above the age of 18 to have a full working knowledge of the Irish system (and all our laws). Ignorance is no defence!

Makes sense without any speak of it in schools

Peregrinus

Noctifer wrote: »

I have all my trades, but I have no way of knowing how much was LTC or ETH worth the moment I traded it for BTC. There is not way you can get correct information on this since the price in a single minute can change multiple times.

You must have had some notion of the value of LTC and ETH at time you made the trade; otherwise on what basis could you possibly have decided to make the trade?

I get that the price of these assets is volatile. If the records generated by your exchange give you the time at which the trade was settled, and a price which is expressed in, or can be valued in, BTC, and BTC does have a value which is expressed in USD and which can be tracked over time, then you can construct a value for your LTC and ETH. If you can't place the time of a trade to closer than a day, then you can work on the basis of the mid-point of the range of values for that day. The revenue will accept any reasonably approach, I think, as long as you apply it consistently to all your trades, and don't try to value each trade on a consistent basis so as to produce the best tax outcome for yourself in respect of that trade.

By choosing to trade in highly volatile assets you have created problems for yourself. (And not just tax problems - there are obvious investment risks associated with this.) These are not problems of the Revenue's making, and I don't think you can gather up your skirts and flounce away just because the Revenue refuses to simplify your affairs for you. Your liablity to tax doesn't depend on whether you enjoy your tax compliance work; it depends on where you are resident.

As for whether you're carrying on an investment or a trade, Irish law doesn't have a rule about this because the legislature doesn't know exactly what you are doing; only you know that. You can lay the facts before the Revenue and ask them for a ruling, but you would be well advised to use the services of an accountant for that, to maximise the chance of getting the ruling which gives you the best outcome. You will need to think, however, about whether the "best outcome" is the one which gives you the lowest compliance burden, or the one which gives you the lowest tax bill. Again, this is something only you can decide; no-one else can decide your priorities for you.

GreeBo

Noctifer wrote: »

They would for the BTC to EUR trade, for the LTC to BTC trade all I would get is info of how much BTC I would get for that LTC. However, because the price can be quite volatile I would have no idea what the price of LTC was the moment I sold it for BTC.

The BTC/LTC exchange is a different entity from the LTC/EUR exchange.

a) You surely had some idea at the time.
b) You can still get some idea by looking at historical prices

It doesnt have to be 100% guaranteed accurate, however it "being hard" is not a good enough reason to decide you are not going to do it at all.

Noctifer

Peregrinus wrote: »

Your liablity to tax doesn't depend on whether you enjoy your tax compliance work; it depends on where you are resident.

Actually residency has nothing to do with it. You can trade crypto and make money from it without there being any link to you. I was hoping things would be better here, but the CGT is way too high and they complicated things. I think I will just give up and not pay tax here.

Noctifer

GreeBo wrote: »

a) You surely had some idea at the time.

Actually no. I look at the price and do the purchase, but if the price drops a few seconds later or it doesn't go up I would make a loss. I rarely hold crypto for more than 10 minutes at a time.

GreeBo

Noctifer wrote: »

Actually residency has nothing to do with it. You can trade crypto and make money from it without there being any link to you. I was hoping things would be better here, but the CGT is way too high and they complicated things. I think I will just give up and not pay tax here.

Thats the equivalent of saying its not illegal if I dont get caught.
Your liability is tied to your residency, end of.

Noctifer wrote: »

Actually no. I look at the price and do the purchase, but if the price drops a few seconds later or it doesn't go up I would make a loss. I rarely hold crypto for more than 10 minutes at a time.

So you bought an asset without knowing if that asset was up or down against the asset you were using to buy it?
Sure.

Fakent.ie

GreeBo wrote: »

So you bought an asset without knowing if that asset was up or down against the asset you were using to buy it?
Sure.

I did that a lot too, to back him up, I never look at the euro/usd values when trading.

Noctifer

GreeBo wrote: »

Thats the equivalent of saying its not illegal if I dont get caught.
Your liability is tied to your residency, end of.

And how exactly would the know I own them tax? The exchange? I don't have an account on any of them. Bank transfers? I only get money from my employer and family members.

GreeBo wrote: »

So you bought an asset without knowing if that asset was up or down against the asset you were using to buy it?
Sure.

Have you ever seen the crypto market? The price can go down if you don't act quick enough. Just because the trade was a good idea 20 seconds ago doesn't mean it will be 30 seconds in the future.

Mistakes can be made.

GreeBo

Noctifer wrote: »

And how exactly would the know I own them tax? The exchange? I don't have an account on any of them. Bank transfers? I only get money from my employer and family members.

How would anyone know you are stealing unless you are caught?
Its called self-reporting.

Noctifer wrote: »

Have you ever seen the crypto market? The price can go down if you don't act quick enough. Just because the trade was a good idea 20 seconds ago doesn't mean it will be 30 seconds in the future.

Mistakes can be made.

No I have never seen the crypto market :rolleyes:
Failing to pay tax isnt a mistake, you want to make money from trading then pay the taxes due in the country you are in.
It really is that simple.

Noctifer

GreeBo wrote: »

Noctifer wrote: »

And how exactly would the know I own them tax? The exchange? I don't have an account on any of them. Bank transfers? I only get money from my employer and family members.

How would anyone know you are stealing unless you are caught?
Its called self-reporting.

Noctifer wrote: »

Have you ever seen the crypto market? The price can go down if you don't act quick enough. Just because the trade was a good idea 20 seconds ago doesn't mean it will be 30 seconds in the future.

Mistakes can be made.

No I have never seen the crypto market :rolleyes:
Failing to pay tax isnt a mistake, you want to make money from trading then pay the taxes due in the country you are in.
It really is that simple.

It's their mistake. If they would have a proper documented system in place I would not mind, that's why I came here to ask questions. But looking at this thread there is a clear lack of information.
Now why would I make such a stupid gamble and report taxes in a system that has no clear rules when I could just do in another country where things are clear?

barneystinson

Noctifer wrote: »

It's their mistake. If they would have a proper documented system in place I would not mind, that's why I came here to ask questions. But looking at this thread there is a clear lack of information.
Now why would I make such a stupid gamble and report taxes in a system that has no clear rules when I could just do in another country where things are clear?

You keep saying the rules aren't clear, where are you getting this from?

It's only the wishful thinkers, wanting special rules applied to their interests, that think there's lack of clarity.

CGT rules are very clear. Tax point is disposal of an asset. Trading one cryptocurrency for another is a disposal of an asset (and acquisition of a different one). Where's the lack of clarity?

Noctifer

barneystinson wrote: »

Noctifer wrote: »

It's their mistake. If they would have a proper documented system in place I would not mind, that's why I came here to ask questions. But looking at this thread there is a clear lack of information.
Now why would I make such a stupid gamble and report taxes in a system that has no clear rules when I could just do in another country where things are clear?

You keep saying the rules aren't clear, where are you getting  this from?

It's only the wishful thinkers, wanting special rules applied to their interests, that think there's lack of clarity.

CGT rules are very clear. Tax point is disposal of an asset. Trading one cryptocurrency for another is a disposal of an asset (and acquisition of a different one). Where's the lack of clarity?

Where are the rules on how to calculate transactions? What about fees, especially fees paid in crypto? How are traders and investors in crypto defined?
People mentioned badges of trade, yet there is no word on it on revenue site.

Fakent.ie

barneystinson wrote: »

You keep saying the rules aren't clear, where are you getting this from?

It's only the wishful thinkers, wanting special rules applied to their interests, that think there's lack of clarity.

CGT rules are very clear. Tax point is disposal of an asset. Trading one cryptocurrency for another is a disposal of an asset (and acquisition of a different one). Where's the lack of clarity?

2 emails from Revenue says thats not true aswell its obviously not clear

barneystinson

Noctifer wrote: »

Where are the rules on how to calculate transactions? What about fees, especially fees paid in crypto? How are traders and investors in crypto defined?
People mentioned badges of trade, yet there is no word on it on revenue site.

What rules on how to calculate transactions? Have you actually looked for guidance on that, as it most definitely is there. Costs of acquisition/disposal are deductible.

As for what constitutes trade and the badges of trade: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-02-06.pdf

You'll see section 3 of the TCA referred to, which contains the definition of "trade" from which everything else then stems, so you can read the manual as being relevant to an individual as well as a company.

barneystinson

Fakent.ie wrote: »

2 emails from Revenue says thats not true aswell its obviously not clear

2? Has someone posted up a second one?

Fakent.ie

barneystinson wrote: »

2? Has someone posted up a second one?

The guy who said it took them 4 weeks to reply

GreeBo

Noctifer wrote: »

Where are the rules on how to calculate transactions? What about fees, especially fees paid in crypto? How are traders and investors in crypto defined?
People mentioned badges of trade, yet there is no word on it on revenue site.

You mean no one called over to your house and sat you down with a cup of tea to explain it all?

What exactly have you researched yourself?

It appears you haven't even looked at revenue.ie so excuse is for not having much sympathy.

Btw you can't just move your tax liability somewhere else, it occurred where it occurred.

Peregrinus

Fakent.ie wrote: »

The guy who said it took them 4 weeks to reply

So then who posted the first one?

Peregrinus

Noctifer wrote: »

It's their mistake. If they would have a proper documented system in place I would not mind, that's why I came here to ask questions. But looking at this thread there is a clear lack of information.
Now why would I make such a stupid gamble and report taxes in a system that has no clear rules when I could just do in another country where things are clear?

Because you don't owe the taxes in another country; you owe them here.

As for a "clear lack of information" and "no clear rules", you've been told again and again what the rules are. You don't like the rules, but that's not the same thing as their being no rules.

and as for your complaints about the Revenue not having a properly documented system in place, it's not the Revenue's job to document your affairs; it's yours. Because you find this onerous, because your affairs are complex, you are proposing to engage in tax evasion. This is a crime, and having paid taxes in another country will not be a defence. You will get no sympathy for that stance in this forum.

Peregrinus

Noctifer wrote: »

Where are the rules on how to calculate transactions?

They're on the revenue site, reflecting what is in the tax legislation, which is also on the web.

Noctifer wrote: »

What about fees, especially fees paid in crypto?

What makes you think fees paid in crypto are treated differently from fees paid in any other currency? Why even would they be? There are rules about fees. They apply to all fees, regardless of whether you pay them in euros, US dollars, Thai baht or eutherium. Why is this so hard to grasp?

Noctifer wrote: »

How are traders and investors in crypto defined?

Why would you expect "traders and investors in crypto" to be defined? It isn't defined, and neither is "traders and investors in scrap metal". There are no special rules about traders and investors in crypto, or about traders and investors in scrap metal; why would there be any need for a definition of either term?

Noctifer wrote: »

People mentioned badges of trade, yet there is no word on it on revenue site.

Really? I googled "badges of trade" site:.ie and this was the first hit. It's from the Revenue site; it's the chapter from the Revenue's Tax and Duty Manual on What Constitutes a Trade? and it makes frequent reference to the badges of trade. And, if you repeat the google search that I did, you'll find lots of hits below the first from Irish sites offering commentary, discussing and explaining the badges of trade and their application in practice, etc.

And, if you care to, you can google "badges of trade" site:revenue.ie to find other pages on the Revenue site that mention the badges of trade.

It's a bit like the value of crypto, Noctifer. The information is readily available and it's not difficult to find it if you want to. It's only difficult if you desperately
want to believe that it's difficult because you need to construct some colourable excuse to yourself for your intended tax evasion.

Noctifer

Peregrinus wrote: »

Because you don't owe the taxes in another country; you owe them here.

That's for me to decide, not them. After all, it is called a self assessment system, thus my assessment is I don't own them any tax.

There are legal ways to go about this.

Noctifer

Peregrinus wrote: »

Really? I googled "badges of trade" site:.ie and this was the first hit.

I didn't get that last week when I tried to search for it. Might be due to the VPN.

Thanks!

Noctifer

Peregrinus wrote: »

Why would you expect "traders and investors in crypto" to be defined? It isn't defined, and neither is "traders and investors in scrap metal". There are no special rules about traders and investors in crypto, or about traders and investors in scrap metal; why would there be any need for a definition of either term?

From what people have said a trader has to report it as income while an investor has to report it as CGT. Those are two very different things. If my day trading puts me into the income category then it could mean a potential issue with my current employer, and I don't want to lose my job.

Peregrinus

Noctifer wrote: »

That's for me to decide, not them. After all, it is called a self assessment system, thus my assessment is I don't own them any tax.

That's not part of the assessment!

Noctifer wrote: »

There are legal ways to go about this.

Well, you haven't pointed to any so far.

Peregrinus

Noctifer wrote: »

From what people have said a trader has to report it as income while an investor has to report it as CGT. Those are two very different things. If my day trading puts me into the income category then it could mean a potential issue with my current employer, and I don't want to lose my job.

How would your current employer even know about this? And what business of his is it to regulate your personal financial affairs and activities?

Noctifer

Peregrinus wrote: »

That's not part of the assessment!


Well, you haven't pointed to any so far.

I wouldn't be trading crypto. My grandmother/father/brother/another family member I trust would do it. They would report CGT in another country and I would get the money.

Noctifer

Peregrinus wrote: »

How would your current employer even know about this? And what business of his is it to regulate your personal financial affairs and activities?

By contract I am obligated to inform my employer if I have a second job. If they would see it as a conflict of interest, I would be in major trouble.

Peregrinus

Noctifer wrote: »

By contract I am obligated to inform my employer if I have a second job. If they would see it as a conflict of interest, I would be in major trouble.

Your private investment activity is not "a second job"; nobody is employing you to do it.

Whether your day-trading in crypto creates a conflict of interest with regard to your principal employment is a question of fact and depends largely, I would guess, on what your principal employment is. But I struggle to believe that whether it creates a conflict of interest is going to depend on which tax regime it falls under.

I seriously doubt that you have a problem here. But, if you do, it's not a problem that can be solved by having your earnings from crypto dealings taxed as capital gains under the Capital Gains Tax Act rather than as income under the Taxes Consolidation Act.

barneystinson

Noctifer wrote: »

I wouldn't be trading crypto. My grandmother/father/brother/another family member I trust would do it. They would report CGT in another country and I would get the money.

That's tax evasion. I thought you knew a legal way to do it!

Noctifer

barneystinson wrote: »

That's tax evasion. I thought you knew a legal way to do it!

How? I am not the one trading crypto. I do not have an account on any exchange. Is there are law that says I can't access another persons account and trade on it?

Peregrinus

Noctifer wrote: »

How? I am not the one trading crypto. I do not have an account on any exchange. Is there are law that says I can't access another persons account and trade on it?

No. But there's nothing in current law which says that your gains are only chargeable if made by effecting transactions on account in your own name. If they're your gains, you're chargeable on them, regardless of how many people have co-operated in how many different ways to enable you to make the gains.

Noctifer

Peregrinus wrote: »

No. But there's nothing in current law which says that your gains are only chargeable if made by effecting transactions on account in your own name. If they're your gains, you're chargeable on them, regardless of how many people have co-operated in how many different ways to enable you to make the gains.

But I would make no gains. In fact, the money would not even go to my Irish bank account.

barneystinson

Noctifer wrote: »

How? I am not the one trading crypto. I do not have an account on any exchange. Is there are law that says I can't access another persons account and trade on it?

Does that not contradict this:

Noctifer wrote: »

I have seen that. The problem is that I am a day trader. As such, I end up paying a lot in fees. For example, I could end the day with a 20 euro gain, but end up paying 100 euros in fees. Last year I ended up earning over 10k, but I payed over 7k in fees. To me that sounds too good to be true as it would drasticly lower my taxable income from trading.

Noctifer

barneystinson wrote: »

Does that not contradict this:

Nope.

barneystinson

Noctifer wrote: »

Nope.

How not? You have said you earned 10k, and now you're saying you didn't? Maybe you don't understand what a contradiction is? https://www.google.com/search?q=Contradiction

Noctifer

barneystinson wrote: »

How not? You have said you earned 10k, and now you're saying you didn't? Maybe you don't understand what a contradiction is? https://www.google.com/search?q=Contradiction

If I don't have an account on any exchange and I didn't receive any payments to my bank accounts, how exactly did I earn money from Revenues perspective?

If there is no corpse, there is no murder.

barneystinson

Noctifer wrote: »

If I don't have an account on any exchange and I didn't receive any payments to my bank accounts, how exactly did I earn money from Revenues perspective?

If there is no corpse, there is no murder.

Ok I think we're done here. I don't intend to continue in a loop with you. Your posts are clear enough and I've pointed out the contradiction.

There's a fundamental distinction between getting away with something, and it not having actually happened. Your posts make it abundantly clear you're aware of this fact, via the magical transformation your gains have undertaken, from CGT, to income tax, to tantrums about Revenue's information or lack thereof, to choosing not to pay any taxes here, to it not actually being your gains at all.... quite the rollercoaster you're on... :rolleyes:

Dades

You seem keen to follow some rules, but not others, when it suits your argument. :pac:

Noctifer wrote: »

If there is no corpse, there is no murder.

Noctifer wrote: »

By contract I am obligated to inform my employer if I have a second job.

Cryptonovice

I got this reply from revenue today. I have deleted my name and the lady who replied to me for privacy purposes. They took 4 weeks to reply initially to my first query and 3 days to reply to my second question which is answered below.

Dear ....., If you sell, gift or exchange your cryptocurrency, this is considered to be a disposal. Capital Gains Tax is payable on any gain you may make at the time of disposal. For disposals made between 1 January and 30 November (the initial period) you must pay CGT by 15 December of the same year. For disposals made between 1 December and 31 December (the later period) you must pay CGT by 31 January of the next year. Further information on the how you calculate and pay Capital Gains Tax can be found on our website; www.revenue.ie Kind regards,..

So I guess thats it finally, Peregrinus, Greebo et al. you were spot on...I had a feeling you were. Anyway, can we please use this thread now for advise purposes because there is people here who know what they are talking about and people who dont have experience in this area (Like myself)

Fakent.ie

Cryptonovice wrote: »

I got this reply from revenue today. I have deleted my name and the lady who replied to me for privacy purposes. They took 4 weeks to reply initially to my first query and 3 days to reply to my second question which is answered below.

Dear ....., If you sell, gift or exchange your cryptocurrency, this is considered to be a disposal. Capital Gains Tax is payable on any gain you may make at the time of disposal. For disposals made between 1 January and 30 November (the initial period) you must pay CGT by 15 December of the same year. For disposals made between 1 December and 31 December (the later period) you must pay CGT by 31 January of the next year. Further information on the how you calculate and pay Capital Gains Tax can be found on our website; www.revenue.ie Kind regards,..

So I guess thats it finally, Peregrinus, Greebo et al. you were spot on...I had a feeling you were. Anyway, can we please use this thread now for advise purposes because there is people here who know what they are talking about and people who dont have experience in this area (Like myself)

Can you post the questions you asked her please.
ye your right it is looking like those lads where right.

bebeman

No CGT on crypto in Belgium, Belarus, Slovenia, Portugal and Panama. If you make million move to one of theses places and cash out.

unkel

No CGT at all in the Netherlands. Capital gains are untaxed. On crypto and on any other capital gains. Has always been like that :cool:

There is a tax on owning capital though, but it is small

Peregrinus

Noctifer wrote: »

But I would make no gains. In fact, the money would not even go to my Irish bank account.

Doesn't matter. You have already told us that:

Noctifer wrote: »

My grandmother/father/brother/another family member I trust would do it. They would report CGT in another country and I would get the money.

Irish residents are taxable on their worldwide income and gains. Your liability to tax does not depend on whether you remit the gains to an Irish bank account, or to a bank account in your own name.

Peregrinus

bebeman wrote: »

No CGT on crypto in Belgium, Belarus, Slovenia, Portugal and Panama. If you make million move to one of theses places and cash out.

Move to one of these places, wait three years so that you cease to be ordinarily resident in Ireland for tax purposes, hope to God that your crypto does not decline in value during this period and then cash out.

Noctifer

Peregrinus wrote: »

Doesn't matter. You have already told us that:

Irish residents are taxable on their worldwide income and gains. Your liability to tax does not depend on whether you remit the gains to an Irish bank account, or to a bank account in your own name.

They are only taxable if Revenue finds out. Trading under a different name and not linking the money to yourself cannot be traced by Revenue.

Imagine someone gets your document and uses them to trade in your name on an exchange. Let's say 5 years down the line Revenue gets data from all exchange for their citizens, on that list is you even though you never did trade crypto. How would you prove to Revenue that it's not you?

Dades wrote: »

You seem keen to follow some rules, but not others, when it suits your argument. :pac:

I rather keep my job and owe Revenue taxes and fees than to lose my job and pay taxes as I am supposed to.

Noctifer

There is also no CGT on crypto you hold for over 1 year in Germany.

Peregrinus

Noctifer wrote: »

They are only taxable if Revenue finds out. Trading under a different name and not linking the money to yourself cannot be traced by Revenue.

No, they're taxable because the disposal has occurred and the gain has been realised. If your strategy for not having them actually taxed involves concealing the disposal and the gain from the Revenue by not complying with your obligation to file a return of your gains, that's tax evasion.

Noctifer wrote: »

Imagine someone gets your document and uses them to trade in your name on an exchange. Let's say 5 years down the line Revenue gets data from all exchange for their citizens, on that list is you even though you never did trade crypto. How would you prove to Revenue that it's not you?

How is that remotely relevant to your situation?

Since you ask, what you have here is a case of identity theft. Victims of identity theft can often be in a sticky situation (and not just with respect to the Revenue) but for an identity theft scam to be successful there has to be some link to the person who has stolen your identity where a link to you would be expected. In the case you suggest, for instance, presumably the person who has stolen your identity won't have arranged with the exchange to pay the disposal proceeds to your bank account; he'll have had them paid to his account. Proving that you're a victim of identity theft involves looking for the connections to your bank account, address, etc that should be there but aren't, or looking for connections to addresses, accounts, etc that are unconnnected with you.

But, as noted, this has nothing to do with the situation you currently face. Regardless of whether you comply with your tax return obligations today, you could someday be a victim of identity theft. That's unfortunate, but I don't see any connection between these two things.

Peregrinus

Noctifer wrote: »

There is also no CGT on crypto you hold for over 1 year.

What makes you think that?