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

Elessar

Irish_rat wrote: »

Which is why a lot of us will be holding long and when it's worth selling in the millions we will be exiting stage left.

I agree 100% with the sentiment but guess what, revenue got you there too. If you leave Ireland you're still legally liable for CGT for the first 3 years.

9.4 Disposals following departure
As outlined in the section above dealing with tax residence, where an individual leaves Ireland following a period of residence they may continue to be ordinarily resident in Ireland for a period of three years following the year of departure. Irish-domiciled individuals will continue to be liable to Irish capital gains tax on their worldwide gains for this period of ordinary residence subject to any Double Taxation Relief being available. Non-Irish-domiciled, but ordinarily resident, individuals will continue to be liable to Irish capital gains tax on any Irish gains and other foreign gains to the extent they are remitted to Ireland.

https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/Tax/ie-tax-ges-moving-abroad-guide.pdf

Page 16.

Rob2D

Elessar wrote: »

I agree 100% with the sentiment but guess what, revenue got you there too. If you leave Ireland you're still legally liable for CGT for the first 3 years.




https://www2.deloitte.com/content/dam/Deloitte/ie/Documents/Tax/ie-tax-ges-moving-abroad-guide.pdf

Page 16.

It's easy. Just never come back:pac:

grindle

Sell 225k in Ireland, receive 150k, live pretty decently for three years in Portugal, sell all, move back if you want.

You could afford this place pretty easily and Portugal's cheap in general.

grindle

correct horse battery staple wrote: »

Yeh but can you buy /rent that house with bitcoin?

Doubt it. Don't want or need to with 150k in the back pocket anyway.

2km from the beach as well, sweet!

grindle

correct horse battery staple wrote: »

Last time we had a bubble it went from 16k to 2k from what I remember, what would happen to your plan if that 150k in back pocket turns into a couple of k?

The €150k is cash to wait and live on until the next cycle and sell the rest during the next pop, if it magically turns to €2k because BTC price goes down society will have disintegrated and we all have much bigger issues.

If crypto crashed to the exact same levels as 2018 I'll still be able to sell the rest with no CGT and have a pretty decent decade.

Thanks for thinking of my welfare though.

Frozen Veg

Can the €1350 annual exemption be aggregated year on year?

For example, if €1k was invested in 2017 and cashed out for €5k in 2021, what balance is there a tax liability on?

grindle

The exemption is on disposal, not aggregated.

grindle

correct horse battery staple wrote: »

If you move to let’s say Portugal next week and immediately sell 150k you are still liable to CGT here for next 3 years.

Bitcoin could be worth anything from zero to a million a coin 3 years from now.

You might've found my initial post hard to parse as you think I don't understand I have to pay CGT initially, so I'll gussy up the relevant line

grindle wrote: »

Sell 225k in Ireland, receive 150k, live pretty decently for three years in Portugal, sell all, move back if you want.

The "receive 150k" part is after CGT.

I don't really care what Bitcoin is worth but if you think it's heading to zero, short it.

Rob2D

How does it work year on year though? Do you have to declare each year? Because that makes no sense.

barneystinson

Rob2D wrote: »

How does it work year on year though? Do you have to declare each year? Because that makes no sense.

Huh?

Declare what?

relax carry on

grindle wrote: »

Sell 225k in Ireland, receive 150k, live pretty decently for three years in Portugal, sell all, move back if you want.

You could afford this place pretty easily and Portugal's cheap in general.

To receive the 150k nett of CGT, your investment cost you nothing? The tax is on the gain so if you've paid nothing and now received 150k free an clear of tax, that sounds like a win to me.

relax carry on

Rob2D wrote: »

How does it work year on year though? Do you have to declare each year? Because that makes no sense.

The normal rules of CGT apply for 99% of this activity. You'll have to understand CGT to understand your potential tax exposure and obligations. You only declare if you have a chargeable event resulting in a Capital Gain/Loss during the tax year.

grindle

relax carry on wrote: »

To receive the 150k nett of CGT, your investment cost you nothing? The tax is on the gain so if you've paid nothing and now received 150k free an clear of tax, that sounds like a win to me.

Good point, I was over simplifying because I'm not doing my tax for this year yet. A decent chunk of it was "free" though, back in 2016 a 390 mined 1 ETH every 5-ish days (could've been more if I didn't game), mined with electricity paid by LL. The amount I paid for a lot of coins sadly won't amount to much either as ETH has gone up 180x since the bulk was bought.

ZeroThreat

Elessar wrote: »

This is an absolute socialist cuckshed of a country.

33% CGT and a measly €1200 tax free. I regularly chat with other crypto investors from the likes of Belgium/Portugal etc. where there are no taxes on crypto. Some are cashing out millions, tax free. Even in the UK the allowance is £12300 before you are taxed and then its only 20%.

We really do get shafted here with capital gains taxes.

Depends on who you are really. The country is designed to facilitate large multinationals and investment banking and anyone else, particularly the little person can go hang.

Frozen Veg

Is there any guidance out there as to how crypto is to be reported to revenue or how payments are to be made? I.e. what section of the annual return it should be included in etc

relax carry on

Frozen Veg wrote: »

Is there any guidance out there as to how crypto is to be reported to revenue or how payments are to be made? I.e. what section of the annual return it should be included in etc

It's been covered repeatedly. For 99% of people your profit is going to be dealt with under Capital Gains Tax. Become familiar with CGT including pay and file dates. For PAYE only individuals it's a form CG1. For self assessed it's the CGT section on your annual form 11.

Mucashinto

Seurat

I’ filling out the cgt 1 form now.
Does anyone know if I just leave lines 7-13 blank?
They seem to be related to property (604.a)
If you have filled out the form before without revenue having a problem i would appreciate knowing how you filled out these lines
Thanks

Irish_rat

Filing tax returns is a dogs dinner.

Revenue need to leave the dinosaur technology and make the process much easier.

relax carry on

Irish_rat wrote: »

Filing tax returns is a dogs dinner.

Revenue need to leave the dinosaur technology and make the process much easier.

The non inclusion the CG1 in the annual Eform 12 tax return for PAYE individuals is out of step with most of their other returns. Pretty much every other major form is online at this stage. The CG1 form is incorporated into the self assessed annual form 11 tax return for example.

langer91

If I buy coins for a mate because of a long waiting list on an exchange, is this a tax event for me? I won’t be making any profit or commission off this. Cheers

Peregrinus

If he's putting up the money, and you are simply his nominee, holding coins that at all time belong in substance to him, and with any profit and loss being exclusively his business, then for tax purposes he treats the coins as his, and you treat them as not yours. Document this arrangement (e.g with an exchange of letters between you and your friend) and in your own records - i.e. on your trading account - make sure the coins are earmarked as his and not mixed in with any coins that belong to you.

seannash

How do crypto loans get categorised by revenue. So if it take out a crypto loan and cash it to euros how does revenue look at that.

grindle

seannash wrote: »

How do crypto loans get categorised by revenue. So if it take out a crypto loan and cash it to euros how does revenue look at that.

It's still your collateral and you're paying interest on the loan so they don't care about it. Your biggest risk is the price of your collateral dropping fast and your position being liquidated to guarantee repayment to the lender - many people have gotten rekt from a few red days affecting their loans, it's like a slightly less risky leveraged long.

bfa1509

langer91 wrote: »

If I buy coins for a mate because of a long waiting list on an exchange, is this a tax event for me? I won’t be making any profit or commission off this. Cheers

Not if you sell at a loss :pac:

Peregrinus

seannash wrote: »

How do crypto loans get categorised by revenue. So if it take out a crypto loan and cash it to euros how does revenue look at that.

Neither borrowing money in one currency nor converting what you have borrowed to another currency is, in itself, a taxable event, so the Revenue don't look at that at all.

I'd be more concerned about the non-tax aspects of this, to be honest. What you're essentially doing here is betting against bitcoin. Suppose you borrow BTC 1 and immediately sell it for €46,000. In (let's say) 1 month you are going to have to repay BTC 1 which, right now, you don't have. You're banking on the fact that at some time in the next month you will be able to buy BTC 1 at a cost of €46,000 or less, and that you will recognise that opportunity, and that you will actually buy 1 BTC at that time. If you don't, then at the end of the month you are going to have to buy BTC 1, no matter what it costs. It could cost a lot more than €46,000, in which case you'll make an enormous loss. Or, if BTC collapses in price, you could make an enormous profit.

Note that any loss or gain arises when you repay the loan, not when you take it out, which is why Revenue ignores the taking out of the loan.

Interesting question as to whether any gain would be chargeable, or any loss deductible. I think the answer is that, yes, it would be. Essentially, by taking out the loan in BTC, you're entering into an obligation to make a payment in a currency which is not the currency of the state. That's a "currency contract". When translated into the currency of the state, the performance of the currency contract may result in either a gain or a loss. The general rule is that, if you're entering into currency contracts in support of a trade you're carrying on (e.g. you enter into a series of contracts to buy, say, sterling over the next six months, which you will use to buy supplies for your business from the UK) then any gain or loss resulting is part of the profits or losses of your trade. But if you're not borrowing the BTC because you need BTC for your trade — if you're essentially doing this to bet on the future price movement of BTC — then this is going to be liable to CGT like any other speculative investment transaction.

But don't quote me on this. It's fairly arcane stuff, and I could be wrong. Talk to an actual accountant with an actual name that you can actually sue if he gives you the wrong advice.

Elessar

Does anyone have any idea how staking is taxed here?

And bonds that provide a daily rate back?

Whelo79

Elessar wrote: »

Does anyone have any idea how staking is taxed here?

And bonds that provide a daily rate back?

I'd imagine you just pay the CGT when you convert the interest/divs to FIAT or trade out to another token. I wouldn't be paying tax every time I received a payout on my stake.

grindle

Whelo79 wrote: »

I'd imagine you just pay the CGT when you convert the interest/divs to FIAT or trade out to another token. I wouldn't be paying tax every time I received a payout on my stake.

It's subject to income tax rather than CGT, same with interest earned from lending sh!tcoins.

Frozen Veg

When doing your PAYE annual return, where do you declare the crypto profits? Is it under 'other income' 'trading profits'?

relax carry on

Frozen Veg wrote: »

When doing your PAYE annual return, where do you declare the crypto profits? Is it under 'other income' 'trading profits'?

Unless you are literally carrying out enough trades every day for it it to be considered trading income (which for 99% of people it won't), you need to complete a pdf form CG1 declare your chargeable gains/losses on that form. You need to familiarise yourself with the rules of CGT.

Frozen Veg

relax carry on wrote: »

Unless you are literally carrying out enough trades every day for it it to be considered trading income (which for 99% of people it won't), you need to complete a pdf form CG1 declare your chargeable gains/losses on that form. You need to familiarise yourself with the rules of CGT.

Okay so fill out the hard copy CG1 Form and post it to revenue and make the tax payment electronically?

relax carry on

Frozen Veg wrote: »

Okay so fill out the hard copy CG1 Form and post it to revenue and make the tax payment electronically?

That's it. You could fill out the pdf on your your device and upload it to them via MyEnquiries in your Revenue MyAccount to have a record of it and to save yourself printing etc.

Frozen Veg

relax carry on wrote: »

That's it. You could fill out the pdf on your your device and upload it to them via MyEnquiries in your Revenue MyAccount to have a record of it and to save yourself printing etc.

Thank you.

Brontosaurus

I'm going to ask some stupid questions, please explain to my like I'm 5:

Is the exchange of one Crypto for another Crypto a taxable event? So if I were to exchange BTC for USDT, and sell USDT for Euro, I'd owe tax both on the BTC-USDT exchange as well as USDT to Euro exchange, effectively being taxed twice? I'd only be making profit on the BTC to USDT exchange anyway, but it makes keeping records of it and filing it trickier.

What about with DEXes like Uniswap? Do I owe tax on exchanging ETH for some sh1tcoin, then tax on exchaning that sh1tcoin back to ETH, and then on selling that ETH for euro?

How is staking taxed? For example, if I were to stake VET and generate VTHO, do I owe an income tax on that VTHO or do I pay capital gains on the VTHO if/when I sell it? I presume then this would increase my yearly income in combination with my day job, and might put me in a higher tax bracket?

Are there lower rates for businesses when it comes to holding and selling crypto assets, as well as staking?

Thanks!

pioneerpro

relax carry on wrote: »

Unless you are literally carrying out enough trades every day for it it to be considered trading income

Undefinable as far as any lay person can tell. If revenue decide that you fall under the vacuous 'badges of trade' bull****, its up to you and your retained counsel to prove otherwise. It's a lose-lose. Presumption is that it's 33% CGT flat, but no one is willing to state that in writing from what I can see - and would really love to be proven wrong on that one, comes down to a 2018 Irish Times article at this point in terms of waving a piece of paper at anyone.

Elessar

Brontosaurus wrote: »

I'm going to ask some stupid questions, please explain to my like I'm 5:

Is the exchange of one Crypto for another Crypto a taxable event? So if I were to exchange BTC for USDT, and sell USDT for Euro, I'd owe tax both on the BTC-USDT exchange as well as USDT to Euro exchange, effectively being taxed twice? I'd only be making profit on the BTC to USDT exchange anyway, but it makes keeping records of it and filing it trickier.

Yes it's taxable, but only on the gains. So if you exchanged BTC for USDT, you're liable for any gains arising from the difference between the price you bought BTC at and the price you sold back into USDT. But USDT is a stable coin so converting back to euro shouldn't trigger any profit.

What about with DEXes like Uniswap? Do I owe tax on exchanging ETH for some sh1tcoin, then tax on exchaning that sh1tcoin back to ETH, and then on selling that ETH for euro?

Yes, doesn't matter where you sold. You owe 33% on the gains of any transaction, even if it's not converted to euro.

How is staking taxed? For example, if I were to stake VET and generate VTHO, do I owe an income tax on that VTHO or do I pay capital gains on the VTHO if/when I sell it? I presume then this would increase my yearly income in combination with my day job, and might put me in a higher tax bracket?

This is unclear it seems. Some people saying its 33% but others saying it's taxed as income. So I don't actually know sorry.

Are there lower rates for businesses when it comes to holding and selling crypto assets, as well as staking?

No idea!

Brontosaurus

Elessar wrote: »

Yes it's taxable, but only on the gains. So if you exchanged BTC for USDT, you're liable for any gains arising from the difference between the price you bought BTC at and the price you sold back into USDT. But USDT is a stable coin so converting back to euro shouldn't trigger any profit.


Yes, doesn't matter where you sold. You owe 33% on the gains of any transaction, even if it's not converted to euro.


This is unclear it seems. Some people saying its 33% but others saying it's taxed as income. So I don't actually know sorry.



No idea!

That clears some things up, thanks! As for staking; so some people are paying 33% CGT and others are paying income tax on it? That would imply that revenue is accepting BOTH...I'd love for them to actually clarify these things but I guess that would require them to understand how Crypto works...

Rob2D

Brontosaurus wrote: »

I'd love for them to actually clarify these things but I guess that would require them to understand how Crypto works...

That's the problem right now. It's very hard for anyone to pay a bill when they don't know how much it is.....

bfa1509

I don't see how staking rewards are any different to a capital gain. Unless people see them as being like a dividend?

If in doubt, over-pay the tax then put in an appeal. The safest way of being tax-efficient (under paying tax;)) is to have revenue give you the money back.

Peregrinus

Brontosaurus wrote: »

That clears some things up, thanks! As for staking; so some people are paying 33% CGT and others are paying income tax on it? That would imply that revenue is accepting BOTH...I'd love for them to actually clarify these things but I guess that would require them to understand how Crypto works...

If you want them to clarify it, you can ask them for a ruling on your own case. They wouldn't need an understanding of "how crypto works"; just of how staking does. And if you understand how staking works, it seems a little condescending to assume that they couldn't.

We have a self-assessment system, one of the consequences of which is that there is some scope for different taxpayers to treat similar transactions/events differently. This isn't a problem when it happens on a small scale or in a niche area; if anything its a slight benefit to taxpayers, because there is some scope for choosing the treatment which produces the best outcome for the individual taxpayer.

If it becomes a big enough issue the revenue can issue guidance. In that situation taxpayers who, in good faith, have previously used a tax treatment that the guidance says is incorrect will not be penalised, but they'll be expected to conform to the guidance for the future (or, if they prefer, take the matter to the Appeal Commissioners and test the correctness of the guidance).

Jackben75

hello. dabbled a bit on 2017, i happen to be up a bit now on the initial investment. Not much but can anybody confirm i can write off the initial investments in 2017 against any liquidated actions this year? Note: i never liquidated any investments of coins before, thanks

connie147

Im no expert, but from what I understand, you only pay CGT on whatever profit you have made, with the 1st €1270 of profit being tax free.

Im sure somebody with more expertise will confirm or deny.

Connie

pioneerpro

Jackben75 wrote: »

hello. dabbled a bit on 2017, i happen to be up a bit now on the initial investment. Not much but can anybody confirm i can write off the initial investments in 2017 against any liquidated actions this year? Note: i never liquidated any investments of coins before, thanks

You only pay CGT once you realise a gain on the asset - via trading, disposing etc... So if you just mean a simple fiat -> cyrpto purchase in 2017, then obviously your capital (the initial purchase price) doesn't factor in.

Formula for CGT owed before you hit your threshold per annum is basically (Gain from Disposal - Purchase Price x 0.33) - €1,270

Jackben75

pioneerpro wrote: »

You only pay CGT once you realise a gain on the asset - via trading, disposing etc... So if you just mean a simple fiat -> cyrpto purchase in 2017, then obviously your capital (the initial purchase price) doesn't factor in.

Formula for CGT owed before you hit your threshold per annum is basically (Gain from Disposal - Purchase Price x 0.33) - €1,270

i have worked it out and would be up about 900, so minus 1270 is '- 370'. Do i even have to submit a tax return in this case?

pioneerpro

Jackben75 wrote: »

i have worked it out and would be up about 900, so minus 1270 is '- 370'. Do i even have to submit a tax return in this case?

Yes, even though you have no liability to capital gains tax, you must file a return.

https://www.irishtimes.com/business/personal-finance/must-you-file-a-cgt-return-if-no-tax-is-due-1.3342384

The full wording from the Guide to Capital Gains Tax is: “A return of all chargeable gains and allowable losses must be made or or before October 31st in the year following the year of disposal.”

relax carry on

Just in case anyone is confused by CGT calculations, you may wish to familiarise yourself with Revenue's examples.

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-to-calculate-cgt.aspx

It's Sale price minus allowable expenses (that includes your purchase price) to arrive at your chargeable gain. You then deduct your annual exemption of €1270 to give your taxable gain. You then multiply your taxable gain by 33% to arrive at the amount of CGT to pay.

Luckycharms_74

Thanks to whoever linked to koinly for tracking. I set up a few accounts with very small holdings in total <$1000, 80% is held on bitstamp.
The plan is to increase holdings this year bit by bit, koinly will help hugely to track it

Alaninwondeand

https://www.independent.ie/business/money-laundering-regime-extended-to-bitcoin-from-april-40203447.html

bfa1509

Alaninwondeand wrote: »

https://www.independent.ie/business/money-laundering-regime-extended-to-bitcoin-from-april-40203447.html

The irony that a technology created to remove the middleman is now regulated and controlled by the middleman.