Taxation of crypto currency trading

wsg9654

Hello all,
As I am relatively new in Ireland and started trading cryptocurrencies before I came to Ireland, I would like to ask fellow cryptocurrency enthusiasts the following:

What is the current state of Irish law regarding taxation of cryptocurrency trading? (via poloniex.com or bittrex.com for example)

I come from Italy and our taxation is quite simple:
You don't pay any taxes for trading altcoins, however, you pay taxes if you want to cash out and convert your Bitcoin to FIAT.

I know that in other European countries, the taxation laws are a bit different. A good friend of mine is from Germany, and in Germany for example, have to pay 48%+ speculation tax on each altcoin trade in case they don't hold it longer than 1 year.

So to repeat my question and maybe give it an example:
Today I buy Ethereum worth 1BTC. Next week I sell the purchased amount of Ethereum and receive 2BTC for it.

Do I need to pay tax for the 1BTC profit I made with this trade?

Or do I only need to pay taxes once I decide to sell the 2BTC for FIAT?


I hope I find some fellow cryptocurrency enthusiasts here. Or maybe someone knows an accountant who knows the legal situation and who wants to help out for money! ; )

Grazie!

wsg9654

Hello,
No altcoin traders here in Ireland?

wsg9654

Still nobody?

CIARAN_BOYLE

wsg9654 wrote: »

Still nobody?

Ok I'll bite. You won't get a certain answer because there is no direct rules passed for cryptocurrencies.

In practice cryptocurrencies are treated as a cgt asset. On sale (and barter counts as sale) you would be taxed at the cgt rate on the taxable gain on that date.

There are weaknesses in the legislative framework so there is a realistic possibility that the current practice could be challenged in a courtroom (by someone with more money than sense).

beaner92

wsg9654 wrote: »

Hello all,
As I am relatively new in Ireland and started trading cryptocurrencies before I came to Ireland, I would like to ask fellow cryptocurrency enthusiasts the following:

What is the current state of Irish law regarding taxation of cryptocurrency trading? (via poloniex.com or bittrex.com for example)

I come from Italy and our taxation is quite simple:
You don't pay any taxes for trading altcoins, however, you pay taxes if you want to cash out and convert your Bitcoin to FIAT.

I know that in other European countries, the taxation laws are a bit different. A good friend of mine is from Germany, and in Germany for example, have to pay 48%+ speculation tax on each altcoin trade in case they don't hold it longer than 1 year.

So to repeat my question and maybe give it an example:
Today I buy Ethereum worth 1BTC. Next week I sell the purchased amount of Ethereum and receive 2BTC for it.

Do I need to pay tax for the 1BTC profit I made with this trade?

Or do I only need to pay taxes once I decide to sell the 2BTC for FIAT?


I hope I find some fellow cryptocurrency enthusiasts here. Or maybe someone knows an accountant who knows the legal situation and who wants to help out for money! ; )

Grazie!

Its tax free buddy. Ive been buying cryptos for a while now..Eos 250% and holding

L.Jenkins

CIARAN_BOYLE wrote: »

Ok I'll bite. You won't get a certain answer because there is no direct rules passed for cryptocurrencies.

In practice cryptocurrencies are treated as a cgt asset. On sale (and barter counts as sale) you would be taxed at the cgt rate on the taxable gain on that date.

There are weaknesses in the legislative framework so there is a realistic possibility that the current practice could be challenged in a courtroom (by someone with more money than sense).

Would Cryptocurrencies not be regarded as Forex?

https://taxinstitute.ie/Portals/0/Lyn/E01_Carney_Lew.pdf

Section 541(6) TCA 1997 provides that s541(1) does not apply to a debt owed by a bank that is denominated in a non-Euro currency (e.g. a non-Euro deposit account), meaning that disposals of non-Euro currency from such accounts can give rise to chargeable gains and losses. In computing the CGT, deposits are treated as acquisitions, and withdrawals are treated as disposals. The “first in, first out” (FIFO) basis of calculation applies, and calculations must be prepared on a daily basis. Where multiple bank accounts exist or frequent transactions occur, the CGT calculations can become quite cumbersome.

The impact of this was addressed to some degree by Revenue in s79C TCA 1997, a measure that was introduced in 2012 to enhance Ireland’s holding-company regime. Where the necessary conditions are met, s79C provides that the non-Euro bank account is not an asset for CGT purposes, thus removing the requirement for companies to prepare CGT calculations for each individual movement in the non-Euro bank account (i.e. deposit and withdrawal) during an accounting period.

Instead, the net exchange gains reflected in the profit and loss account are chargeable to corporation tax under Schedule D, Case IV (at a rate of 25%), rather than CGT (at a rate of 33%). To remove any benefit that may be obtained by virtue of this tax-rate differential, the chargeable amount is subject to an adjustment to make the tax payable equate to the amount that would have been payable if CGT applied instead of Case IV.