Tax on Bitcoin Profits

ZeroThreat

Peregrinus wrote: »

CGT is calculated on the same basis for individuals and companies.

The way to avoid CGT on the gains made on disposal of assets is to engage in the activity of acquiring and disposing of assets with such scale, system, method and regularity that the Revenue will accept that this is not an investment activity, but a trade. (You may buy paintings, say, as investment, but an art dealer buys them as stock-in-trade.) If the Revenue can be persuaded that you are trading in bitcoins, then your earnings from the activity will not be subject to CGT but will be subject instead to income tax as the profits of your trade.

(Note that this normally results in a higher tax liablity, not a lower one, so the argument is usually the other way around - the Revenue insisting that the taxpayer is carrying on a trade, the taxpayer saying, no, this is just a serious of investment transactions.)

It's more difficult for the revenue vultures to claim that making a few 10ks from Bitcoin is a trade if someone is a PAYE worker in full time employment and just does this in their own free time on the side.

barneystinson

ZeroThreat wrote: »

It's more difficult for the revenue vultures to claim that making a few 10ks from Bitcoin is a trade if someone is a PAYE worker in full time employment and just does this in their own free time on the side.

Because no-one with a day job also carries on a self employed trade? :rolleyes:

It's unlikely that Revenue would argue someone making gains from Bitcoin was engaged in a trade, but not for that reason.

cnocbui

h0neybadger wrote: »

What if...

I run some hardware to mine bitcoins.

I sell my coins each month, and this covers my running costs, electricity, premises rental etc.

Do I still pay capital gains if I do it through a registered business?

I would have thought CGT has nothing to do with this scenario, since you are not acquiring an asset and then disposing of it, you are 'mining' it, or more accurately; being paid for your efforts. The Bitcoin should be treated as income so tax would be on income less expenses and capital depreciation.

Peregrinus

cnocbui wrote: »

I would have thought CGT has nothing to do with this scenario, since you are not acquiring an asset and then disposing of it, you are 'mining' it, or more accurately; being paid for your efforts. The Bitcoin should be treated as income so tax would be on income less expenses and capital depreciation.

Mmm. I don't pretend to understand fully exactly what is involved in mining bitcoins, as opposed to just buying them, but based on my rather limited reading on the subject I think you could probably run the argument that mining bitcoins is, if not a trade, at least "an adventure in the nature of a trade", and so the earnings are liable to income tax, not CGT.

However, as noted, being liable to income tax rather than CGT usually results in a greater liablity for the taxpayer, not a lesser, so I doubt if very many taxpayers are arguing the case. And I'm not aware that the Revenue are pushing it.

cnocbui

Peregrinus wrote: »

Mmm. I don't pretend to understand fully exactly what is involved in mining bitcoins, as opposed to just buying them, but based on my rather limited reading on the subject I think you could probably run the argument that mining bitcoins is, if not a trade, at least "an adventure in the nature of a trade", and so the earnings are liable to income tax, not CGT.

However, as noted, being liable to income tax rather than CGT usually results in a greater liablity for the taxpayer, not a lesser, so I doubt if very many taxpayers are arguing the case. And I'm not aware that the Revenue are pushing it.

It's called mining for a reason. You purchase and operate expensive capital equipment and then do massive computational work with it. You are rewarded, by being given bitcoins in return, so you don't purchase them. This activity consumes a very large amount of electricity, 24/7, so you have significant operating costs. You also require an internet connection, so that too is a cost.

The activity more closely resembles a small business than share trading or the like. Luckily for me, my son is the one carrying out the Etherium mining on the rig in his bedroom, so the tax will likely be nonexistent given his total earnings will be below the threshold.

Peregrinus

cnocbui wrote: »

It's called mining for a reason. You purchase and operate expensive capital equipment and then do massive computational work with it. You are rewarded, by being given bitcoins in return, so you don't purchase them. This activity consumes a very large amount of electricity, 24/7, so you have significant operating costs. You also require an internet connection, so that too is a cost.

Hmm. The power consumption and the internet connection are, I'm guessing, trivial in cash terms. The cost of purchasing the hardware (and software, if there's a cost to that) looks like a capital expense and so isn't deductible in calculating profits. You might be able to claim a capital allowance for it.

cnocbui wrote: »

The activity more closely resembles a small business than share trading or the like. Luckily for me, my son is the one carrying out the Etherium mining on the rig in his bedroom, so the tax will likely be nonexistent given his total earnings will be below the threshold.

It's lucky for your son, possibly, but I don't see how it's lucky for you. Whether it's income or capital gains, any tax liability is your son's; you're not affected one way or the other.

On the assumption that you pay the ESB bill and the internet provider's bill, your son won't be able to claim a deduction for these costs, obviously.

As a matter of interest, when you say you are "rewarded" with bitcoins for doing computational work, who exactly rewards you?

Elessar

Here's a really good breakdown on tax obligations for cryptocurrencies here:

https://www.taxback.com/blog/cracking-the-code-of-irish-cryptocurrency-tax

What I get from it is that if you've ever made a gain or loss from a trade (which lets face it is all of them) you need to declare it, even if you made a loss. So revenue will need details of every single trade you've ever made on any exchange, along with details of associated gains or losses.

What I don't get is do you have to do this only when you transfer gains/losses to your EUR bank account or at all times regardless? i.e. if you have a few €k in coins on coinbase do you need to declare a loss or gain if you sell high and re-buy low, or only when you remove the euro back to your bank a/c?

Peregrinus

Elessar wrote: »

Here's a really good breakdown on tax obligations for cryptocurrencies here:

https://www.taxback.com/blog/cracking-the-code-of-irish-cryptocurrency-tax

What I get from it is that if you've ever made a gain or loss from a trade (which lets face it is all of them) you need to declare it, even if you made a loss. So revenue will need details of every single trade you've ever made on any exchange, along with details of associated gains or losses.

What I don't get is do you have to do this only when you transfer gains/losses to your EUR bank account or at all times regardless? i.e. if you have a few €k in coins on coinbase do you need to declare a loss or gain if you sell high and re-buy low, or only when you remove the euro back to your bank a/c?

You make the gain when you effect the transaction, and not when (or indeed if) you remit the transaction proceeds to your EUR bank account. So, yes, you account for a gain or loss on every transaction.

A tax practitioner can correct me, but I have an idea the Revenue will allow you to apply an average exchange rate when it comes to expressing your gains and losses in euros. So you don't have to value each gain or loss at the EUR exchange rate prevailing on the transaction day; you just sum all your gains and loses for the year and then convert that figure into Euros using the average exchange rate for the year.

AndrewJRenko

Peregrinus wrote: »

A tax practitioner can correct me, but I have an idea the Revenue will allow you to apply an average exchange rate when it comes to expressing your gains and losses in euros. So you don't have to value each gain or loss at the EUR exchange rate prevailing on the transaction day; you just sum all your gains and loses for the year and then convert that figure into Euros using the average exchange rate for the year.

For share trading, the Revenue rules used to require you to pick a consistent approach to currency and stick to it. So you can't pick and choose based on the best outcome for different trades.

cnocbui

Peregrinus wrote: »

Hmm. The power consumption and the internet connection are, I'm guessing, trivial in cash terms. The cost of purchasing the hardware (and software, if there's a cost to that) looks like a capital expense and so isn't deductible in calculating profits. You might be able to claim a capital allowance for it.


It's lucky for your son, possibly, but I don't see how it's lucky for you. Whether it's income or capital gains, any tax liability is your son's; you're not affected one way or the other.

On the assumption that you pay the ESB bill and the internet provider's bill, your son won't be able to claim a deduction for these costs, obviously.

As a matter of interest, when you say you are "rewarded" with bitcoins for doing computational work, who exactly rewards you?

For tax reasons, should it come to that, I would of course -cough - have to charge my son for the electricity consumed and a share of the Internet costs.

It currently takes about 3 months to mine a single bitcoin with the most efficient miner on the market. Most small scale miners join a mining pool and are rewarded/paid their bitcoin from the pool, but strictly speaking, I believe the mining network software pays out the bitcoin on successful completion of a block automatically.

I roughly calculate that it takes about a 1 MW of electricity to mine one bitcon - so about €163 worth of electricity every 3 months with the best gear.

The power consumption and cost of electricity is anything but trivial and is critical to profitability. The main reason my son and I have a miner is to take advantage of the heat produced in the hope this offsets and reduces the amount of heating oil currently needed.

As I said, we are mining Etherium, not bitcoin, using PC GPUs rather than a specialised bitcoin miner.

alb

Peregrinus wrote: »

As a matter of interest, when you say you are "rewarded" with bitcoins for doing computational work, who exactly rewards you?

cnocbui wrote: »

but strictly speaking, I believe the mining network software pays out the bitcoin on successful completion of a block automatically.

Strictly speaking the miner that solves a block includes a transaction in the block that transfers 'newly generated coins' (i.e. coins with no previous transaction history) to themselves. This is called a coinbase transaction (unrelated to the company Coinbase, which named themselves after it) The rest of the network accepts the block and that coinbase transaction if it is valid in terms of the rules of the system.

The best equivalent to this is grabbing a shovel and going into the mountains and digging up some gold. You haven't been awarded it by anyone, you effectively earned it directly yourself. However revenue would treat that gold, is probably how mined bitcoin should be treated.

Peregrinus

cnocbui wrote: »

For tax reasons, should it come to that, I would of course -cough - have to charge my son for the electricity consumed and a share of the Internet costs.

No need for the cough, cnocbui. If the boy is generating 4 bitcoins a year, that's about, what, EUR 13.5K at today's prices? If he's earning that, he can bloody well pay the power bill, which on the figures you give will be about EUR 500.

And, yes, the EUR 5OO power bill is deductible to him.

Lets see: if he earns EUR 13K (after deducting the power bill) tax on that is EUR 2,600. Deduct his personal credit of EUR 1,650 (he doesn't get an employee tax credit because he's not an employee) and his tax payable is 950. He'll also pay USC (since his gross income exceeds EUR 13K); that'll be about EUR 85. Plus class S social insurance at 4%; another EUR 520. So say about EUR 1500, all in.

If the transactions are treated as capital rather than trade, the immediate tax liability is nil, since the transactions are all acquisitions. There'll be no CGT liablity until the bitcoins are disposed of. However, if he disposes of them all in the year he acquires them, and at the current market value, he can deduct the EUR 500 power bill, and the EUR 1,270 annual small against exemption, leaving a net gain of EUR 11,730, and a CGT bill of roughly EUR 3,570. If he staggers the disposal of the coins over several years he can claim the annual small gains exemption more than once, obviously.

h0neybadger

Peregrinus wrote: »

No need for the cough, cnocbui. If the boy is generating 4 bitcoins a year, that's about, what, EUR 13.5K at today's prices? If he's earning that, he can bloody well pay the power bill, which on the figures you give will be about EUR 500.

And, yes, the EUR 5OO power bill is deductible to him.

Lets see: if he earns EUR 13K (after deducting the power bill) tax on that is EUR 2,600. Deduct his personal credit of EUR 1,650 (he doesn't get an employee tax credit because he's not an employee) and his tax payable is 950. He'll also pay USC (since his gross income exceeds EUR 13K); that'll be about EUR 85. Plus class S social insurance at 4%; another EUR 520. So say about EUR 1500, all in.

If the transactions are treated as capital rather than trade, the immediate tax liability is nil, since the transactions are all acquisitions. There'll be no CGT liablity until the bitcoins are disposed of. However, if he disposes of them all in the year he acquires them, and at the current market value, he can deduct the EUR 500 power bill, and the EUR 1,270 annual small against exemption, leaving a net gain of EUR 11,730, and a CGT bill of roughly EUR 3,570. If he staggers the disposal of the coins over several years he can claim the annual small gains exemption more than once, obviously.

would this same principal apply if this was a monthly occurrence?

Say you were mining approx 4 bitcoins a month.
Selling enough to pay electricity cost.
But not selling the rest. Holding out for a rainy day.

What would happen then?

Peregrinus

h0neybadger wrote: »

would this same principal apply if this was a monthly occurrence?

Say you were mining approx 4 bitcoins a month.
Selling enough to pay electricity cost.
But not selling the rest. Holding out for a rainy day.

What would happen then?

On the figures concbui gives, you'd only have to sell about 5% of the bitcoins you mine in order to cover your electricity costs. So you'd be sitting on 95% of them.

It's very hard to argue that that's either a trade or an adventure in the nature of trade. The whole concept of trade pretty much involves buying and selling. I'd say what you're doing there is acquiring assets for long term investment, and you'll have no liability to tax until you dispose of them, and when that happens you'll be liable to CGT, not income tax.

cnocbui

Peregrinus wrote: »

On the figures concbui gives, you'd only have to sell about 5% of the bitcoins you mine in order to cover your electricity costs. So you'd be sitting on 95% of them.

It's very hard to argue that that's either a trade or an adventure in the nature of trade. The whole concept of trade pretty much involves buying and selling. I'd say what you're doing there is acquiring assets for long term investment, and you'll have no liability to tax until you dispose of them, and when that happens you'll be liable to CGT, not income tax.

Revenue are likely to rule you are engaged in a revenue generating enterprise and that you have not purchased any assets and then disposed of them, which is the case. If you hold off on converting your mined bitcoin to fiat in a latter year, the income for that year is going to be very substantial and you could find yourself paying a lot more of your tax at the top marginal rate than if you spread the income evenly over each year.

4 Bitcoin a month is going to cost you at least €39,000 in capital equipment and you would be running an electricity bill of €650 a month for your 4 MW of power.

It's like a gold miner buying equipment, digging up ore, processing and refining it, stacking up the gold bars and then years later trying to argue when he sells them that he should be assessed as having made a capital gain, even though he didn't purchase any refined gold from anyone.

h0neybadger

Actually, figures are approx €55,000 hardware investment.
Monthly electricity costs approx €3,400...

There are variations of hardware available, but the most cost effective ones are too expensive to obtain.
The ones that are available, have a higher monthly cost.

Mining 4 bitcoins a month, requires selling 25% of them to cover electricity costs. So effectively selling 1 bitcoin to make 3.

alb

You can't calculate 'per month' figures that are of any use, because you don't know what the future price of bitcoin will be, or what the future difficulty of mining will be.

cnocbui

h0neybadger wrote: »

Actually, figures are approx €55,000 hardware investment.
Monthly electricity costs approx €3,400...

There are variations of hardware available, but the most cost effective ones are too expensive to obtain.
The ones that are available, have a higher monthly cost.

Mining 4 bitcoins a month, requires selling 25% of them to cover electricity costs. So effectively selling 1 bitcoin to make 3.

I was going on Antminer S9s on ebay at €3200 each and needing 12 of those to generate 4 BTC per month for the 1 MW per bitcoin at €160 per MW.

Anyway, isn't the corporate tax rate 25% for mining? Better than the 33% CGT rate.

barneystinson

cnocbui wrote: »

I was going on Antminer S9s on ebay at €3200 each and needing 12 of those to generate 4 BTC per month for the 1 MW per bitcoin at €160 per MW.

Anyway, isn't the corporate tax rate 25% for mining? Better than the 33% CGT rate.

So the company pays tax at 25%. You the individual still haven't seen a penny personally, and will have to pay further tax on extracting the cash.

h0neybadger

4 Antminer S9's won't generate 4 BTC a month. You'll need closer to 40 of them to do that.

cnocbui

h0neybadger wrote: »

4 Antminer S9's won't generate 4 BTC a month. You'll need closer to 40 of them to do that.

I bow to your no doubt far more in-depth and realistic costings. I was only going roughly and spent about 5 minutes on it.

I said 12, not 4. This review says an Antminer S9 will mine 0.36 bitcoin in a month, so 3 would mine one bitcoin in a month; 3 * 4 = 12.

That was 8 months ago so the difficulty no doubt has increased and those rough calculations would no longer apply.

I imagine the Chinese government will soon ban bitcoin mining so used Antminer S9s will probably appear on Alibaba by the container load for a fraction of current prices.

cnocbui

barneystinson wrote: »

So the company pays tax at 25%. You the individual still haven't seen a penny personally, and will have to pay further tax on extracting the cash.

Hadn't thought that far, true.

Webmonkey

cnocbui wrote: »

I bow to your no doubt far more in-depth and realistic costings. I was only going roughly and spent about 5 minutes on it.

I said 12, not 4. This review says an Antminer S9 will mine 0.36 bitcoin in a month, so 3 would mine one bitcoin in a month; 3 * 4 = 12.

That was 8 months ago so the difficulty no doubt has increased and those rough calculations would no longer apply.

Indeed, the bitcoin difficulty has been on the rise since: (https://bitcoinwisdom.com/bitcoin/difficulty)

The S9 now does an estimated ~0.09 BTC per month https://www.cryptocompare.com/mining/calculator/btc?HashingPower=13.5&HashingUnit=TH%2Fs&PowerConsumption=1500&CostPerkWh=0.12

I imagine the Chinese government will soon ban bitcoin mining so used Antminer S9s will probably appear on Alibaba by the container load for a fraction of current prices.

Already rumours out about it: http://news.8btc.com/will-bitcoin-mining-farm-in-china-be-closed. China FUD is big right now.

jobless

how is gifting digital assets treated for tax..... say i gift an amount and its value trebles over the next 5 years... is the other person liable for CGT?

barneystinson

jobless wrote: »

how is gifting digital assets treated for tax..... say i gift an amount and its value trebles over the next 5 years... is the other person liable for CGT?

How do you gift a digital asset?

jobless

barneystinson wrote: »

How do you gift a digital asset?

transfer it to a wallet that person owns.... and they cash it out down the road on their own exchange account?

cnocbui

barneystinson wrote: »

How do you gift a digital asset?

Get them to install a wallet then tell you their receiving address and then you just send the crypto gift from your wallet to theirs. Alternatively, just hand over your wallet and password to them.

Peregrinus

jobless wrote: »

how is gifting digital assets treated for tax..... say i gift an amount and its value trebles over the next 5 years... is the other person liable for CGT?

Yes. Why wouldn't they be? Intangible assets are not treated differently from tangible assets for CGT purposes.

jobless

Peregrinus wrote: »

Yes. Why wouldn't they be? Intangible assets are not treated differently from tangible assets for CGT purposes.

what is that person live in a country with no cgt?

Peregrinus

jobless wrote: »

what is that person live in a country with no cgt?

In that case the tax treatment of someone who receives a gift of bitcoins will be decided according to the tax laws of that country. So we can't really give an answer without knowing what the country is, and what its tax laws say.

It's a reasonably safe bet, though, that the tax consequences will be the same regardless of whether the asset is tangible (land, goods) or intangible (stocks, shares, bonds, bitcoins). What possible policy reason could there be for treating tangible and intangible assets differently for tax purposes?

ZeroThreat

jobless wrote: »

what is that person live in a country with no cgt?

Pretty sure that all Irish citizens are liable to CT worldwide gains.
Unless you want to give up your passport like the Malteeser


Edit : Or maybe it's simply Irish Domiciled, not sure.

Peregrinus

ZeroThreat wrote: »

Pretty sure that all Irish citizens are liable to CT worldwide gains.
Unless you want to give up your passport like the Malteeser


Edit : Or maybe it's simply Irish Domiciled, not sure.

It's Irish-resident. Citizenship is irrelevant.

ZeroThreat

Peregrinus wrote: »

It's Irish-resident. Citizenship is irrelevant.

yeah, that seems about right, pretty sure Dobby still has a harp on his passport.

jobless

Peregrinus wrote: »

In that case the tax treatment of someone who receives a gift of bitcoins will be decided according to the tax laws of that country. So we can't really give an answer without knowing what the country is, and what its tax laws say.

It's a reasonably safe bet, though, that the tax consequences will be the same regardless of whether the asset is tangible (land, goods) or intangible (stocks, shares, bonds, bitcoins). What possible policy reason could there be for treating tangible and intangible assets differently for tax purposes?

not sure, thats why i ask... just trying to find out how it works...

cnocbui

If you are looking at a life-changing amount of gain, just emigrate before realising it. I think someone said that Germany doesn't have CGT if you have held an asset for more than 12 months. You could always come back after you had been tax resident outside Ireland for 6.01 months or more.

Shamo

cnocbui wrote: »

If you are looking at a life-changing amount of gain, just emigrate before realising it. I think someone said that Germany doesn't have CGT if you have held an asset for more than 12 months. You could always come back after you had been tax resident outside Ireland for 6.01 months or more.

I was reading up on this and it said you are liable up to 3 years after moving out of Ireland and being resident elsewhere. Does the Double Taxation Agreement between said countries avoid this 3 year wait?

cnocbui

Shamo wrote: »

I was reading up on this and it said you are liable up to 3 years after moving out of Ireland and being resident elsewhere. Does the Double Taxation Agreement between said countries avoid this 3 year wait?

Well if you paid tax of 10%, in another country they would be able to ask for the balance, but could not tax you twice.

But in the real world:

1) How would they ever know? You wouldn't be silly enough to go using your Irish bank account.

2) Wait 3 years or don't come back.

If you look at the full scope of the tax regime in this country, you really, really aught to think twice before even contemplating coming back - IMO.

Shamo

cnocbui wrote: »

Well if you paid tax of 10%, in another country they would be able to ask for the balance, but could not tax you twice.

But in the real world:

1) How would they ever know? You wouldn't be silly enough to go using your Irish bank account.

2) Wait 3 years or don't come back.

If you look at the full scope of the tax regime in this country, you really, really aught to think twice before even contemplating coming back - IMO.

Agreed, the tax setup in this country is a joke.

AndrewJRenko

cnocbui wrote: »

But in the real world:

1) How would they ever know? You wouldn't be silly enough to go using your Irish bank account.

You know that banks share data with tax authorities, and tax authorities share data with other tax authorities, right?

barneystinson

Shamo wrote: »

Agreed, the tax setup in this country is a joke.

In what way, that you have to pay tax, is it?

cnocbui

AndrewJRenko wrote: »

You know that banks share data with tax authorities, and tax authorities share data with other tax authorities, right?

Yes, I am, given that such supposedly applies to me personally.

Imagine the New Zealand Tax Office flooding Revenue with a list of all the bank accounts held there by Irish citizens. What is Revenue going to do with details of the 300 bank accounts held by Paul Murphy? I am pretty doubtful the New Zealand tax office would have the PPS numbers of Irish citizens there.

I take the media stories of this massive data sharing with a bucket of salt. it's just scare tactics for the most part in terms of bulk exchanges of information. I don't think most people would have anything to worry about except where they were actually being targeted by revenue and Revenue was asking a foreign tax office about a specific individual.

cnocbui

myshirt wrote: »

Cnocbui, you are way behind buddy. Way behind.

Look up CRS, read about FATCA. Be a good start for you, but ultimately educate yourself about what is going on. And talk to a professional rather than the lads down the pub.

Anyway, moving on Blockchain has more applications than just bitcoin. Once it matures ironically no one will be anonymous. Bad for tax evaders, but also bad for people traffickers.

In short, if you as much as farted at the scene of any of the long list of things you can do according to this thread, it's possible to be able to link you to it.

I'm not your buddy.

As for being way behind: I hold dual nationalities and I have had bank accounts in a foreign country for decades. I have even told Revenue about them. I have never been queried about transactions made on those accounts. Contrary to what you might think, I do pay my taxes, however, were I to move to a foreign country and realise a capital gain on a crypto, I wouldn't be inclined to pay CGT to Revenue. To the foreign country's tax authority, yes, but hell could freeze over before I made a payment to Revenue in those circumstances.

FACTA and the like are just public relations scare tactics without absolute identifying data such as PPS numbers.

A lot can be done if an individual is actively targeted and a lot of resources are thrown at it, but any notion there is automatic and accurate matching up of individuals across borders is currently a nonsense. I think the media stories are more designed to scare people into being honest than they are actually about systems that have much chance of catching people who are dishonest, automatically.

Shamo

barneystinson wrote: »

In what way, that you have to pay tax, is it?

3rd highest CGT in the world and overly complex tax reporting for ETFs such as for the VOO index fund. Vulture funds get a nice 12% though (officially).

relax carry on

cnocbui wrote: »

I'm not your buddy.

As for being way behind: I hold dual nationalities and I have had bank accounts in a foreign country for decades. I have even told Revenue about them. I have never been queried about transactions made on those accounts. Contrary to what you might think, I do pay my taxes, however, were I to move to a foreign country and realise a capital gain on a crypto, I wouldn't be inclined to pay CGT to Revenue. To the foreign country's tax authority, yes, but hell could freeze over before I made a payment to Revenue in those circumstances.

FACTA and the like are just public relations scare tactics without absolute identifying data such as PPS numbers.

A lot can be done if an individual is actively targeted and a lot of resources are thrown at it, but any notion there is automatic and accurate matching up of individuals across borders is currently a nonsense. I think the media stories are more designed to scare people into being honest than they are actually about systems that have much chance of catching people who are dishonest, automatically.

I'm afraid the day of not paying attention to data relating to assets held by citezens in other states is rapidly coming to a close. FATCA, DAC, and the CRS while in their early stages will yield either direct benefit from tax recouped or indirect from their deterrent value.

https://www.revenue.ie/en/companies-and-charities/international-tax/aeoi/what-is-aeoi.aspx

ZeroThreat

Shamo wrote: »

3rd highest CGT in the world and overly complex tax reporting for ETFs such as for the VOO index fund. Vulture funds get a nice 12% though (officially).

Perversely, most of the vulture funds had charity status to avoid paying ANY tax.

I guess average joe/jane citizen gets ridden up the jacksie with no lube to compensate for vulture funds charitable status, low CT rates, tax evasion by tech companies facilitated by the government/legal bills in the millions to defend methods used by said companies.

But then we're going off topic.

cnocbui

relax carry on wrote: »

I'm afraid the day of not paying attention to data relating to assets held by citezens in other states is rapidly coming to a close. FATCA, DAC, and the CRS while in their early stages will yield either direct benefit from tax recouped or indirect from their deterrent value.

https://www.revenue.ie/en/companies-and-charities/international-tax/aeoi/what-is-aeoi.aspx

You move to a another country. You are now resident there for tax purposes and make a capital gain on your crypto and then pay CGT in your new tax jurisdiction, if required.

Please do tell me how Revenue will be aware of this and what they can practically do to even ask you to cough up, let alone what they can do if you don't? They wouldn't even have your address or contact details to so much as send you a letter.

ZeroThreat

cnocbui wrote: »

You move to a another country. You are now resident there for tax purposes and make a capital gain on your crypto and then pay CGT in your new tax jurisdiction, if required.

Please do tell me how Revenue will be aware of this and what they can practically do to even ask you to cough up, let alone what they can do if you don't? They wouldn't even have your address or contact details to so much as send you a letter.

extraordinary rendition?

AndrewJRenko

cnocbui wrote: »

Yes, I am, given that such supposedly applies to me personally.

Imagine the New Zealand Tax Office flooding Revenue with a list of all the bank accounts held there by Irish citizens. What is Revenue going to do with details of the 300 bank accounts held by Paul Murphy? I am pretty doubtful the New Zealand tax office would have the PPS numbers of Irish citizens there.

I take the media stories of this massive data sharing with a bucket of salt. it's just scare tactics for the most part in terms of bulk exchanges of information. I don't think most people would have anything to worry about except where they were actually being targeted by revenue and Revenue was asking a foreign tax office about a specific individual.

So, so maybe the NZ banks don't have your Irish PPS number. But is there a document somewhere linking your Irish PPS number with your NZ id number or equivalent, maybe on your visa application?

And if the NZ tax authorities haven't bothered to match up these details this year, are you confident they won't bother to do it next year, or the year after?

Here's a list of people who were all sure they were smarter than Revenue;

https://www.revenue.ie/en/corporate/press-office/list-of-defaulters/index.aspx

They were wrong.

cnocbui

ZeroThreat wrote: »

extraordinary rendition?

At least you get it, because that is about what it would take.

AndrewJRenko wrote: »

So, so maybe the NZ banks don't have your Irish PPS number. But is there a document somewhere linking your Irish PPS number with your NZ id number or equivalent, maybe on your visa application?

And if the NZ tax authorities haven't bothered to match up these details this year, are you confident they won't bother to do it next year, or the year after?

Here's a list of people who were all sure they were smarter than Revenue;

https://www.revenue.ie/en/corporate/press-office/list-of-defaulters/index.aspx

They were wrong.

Dual citizenship means I am an Irish citizen and have an Irish passport, so no visas or forms or either tax jurisdiction having any clue about anything.

Once you emigrate, you change legal and tax jurisdictions, unless you are an American. Revenue have a neck so long as to make a giraffe jealous, but even they have to pull it in on occasion and people emigrating is one of them. You leave the country, that's it - sayonara, and thanks for all the fish.

Even without looking at your list I can tell you one thing with absolute certainty - not one of those people had moved to another country or was renditioned from a foreign country. Bitcoin could hit a million a piece and you could sell several for a massive profit the week after you moved and your only practical obligation would be to abide by the CGT requirements of the country you had moved to. If you become a resident of a foreign country for tax purposes, Revenue will never be informed by that country of bank accounts you might open there or what transactions transpire on them while that is the case, the inter-government data sharing, when it eventually gets going, only applies to people who have accounts in the country but are not resident there for tax purposes.

exaisle

pro_gnostic_8 wrote: »

Interesting thread !

Gents, may I ask please ...............
If I were to buy gold with my bitcoin profits and using bitcoin to do so, would I be liable for CGT?
I.E., is CGT only liable if cashing out to fiat -- or is it also payable if cashing out to gold?

Yes. CGT arises on the disposal of the asset.