Circulating Money Between IE & Non-EU

sakin

Hello Boards.ie!

tl:dr: I want to transfer 20K Euro to my personal AIB account from my personal non-EU bank account. Then I will transfer this 20K to an other SEPA country (Germany). This will happen several times a week. Net amount will not change in Irish bank account, whatever comes will directly go to Germany immediately. Is this tax compliant?

(I talked to AIB but they couldn't help with my tax related question and advised me to send an email to Revenue. I did it but it says it might take 20-30 business days to receive a reply. So decided to ask here)

Long version:

I am a non-EU citizen, Irish resident (not Irish domiciled) and paying my taxes with PAYE system in Ireland.

I have concerns regarding international bank transfer. But let me first define my current situation:

1. I am sending X amount of Euro to an UK based Bitcoin Exchange's Euro bank account, which is in Japan, from my personal non-EU account via SWIFT

2. I buy Bitcoin from UK Bitcoin Exchange and transfer them to a non-EU Bitcoin Exchange

3. Sell the Bitcoin for non-EU currency. Then I withdraw this amount to my non-EU bank account

4. Convert this amount to Euro and re-send again exactly same X amount of Euro to UK Exchange's bank account in Japan and so on

I double checked with tax advisors in my home country and I am paying all my taxes that I am responsible there.

I noticed that transferring Euro to UK Exchange from Ireland is much cheaper and faster than transferring from non-EU. Because exchange's Euro account for SWIFT transfers is in Japan, but Euro account is in Germany (Single Euro Payments Area).

Hence, I am considering to transfer Euro to Ireland from non-EU, then to Germany from Ireland. At the end of this process, amount in my Irish bank account will not change. The amount that will leave my Irish bank account will exactly be same that will enter to bank account.

To give an example, I will send 20K Euro from non-EU to Ireland and send 20K Euro from Ireland to Germany. I will do this several times in a week and net amount in my Irish bank account will remain the same.

I want to do that just because sending money from [non-EU to Ireland + Ireland to Germany] is cheaper and faster than sending to Japan from non-EU.

I talked to my Bank (AIB) and they said I can transfer any amount from my personal account abroad to personal account in Ireland with 6.35 Euro fee.

Do I need to fill a tax form or notify any authority for this procedure? Is this operation tax compliant?

CIARAN_BOYLE

As a non domiciled Irish resident you are liable for capital gains tax on any gains made on assets outside the state which are then remitted into the state.

Bringing the money into the state even if only temporarily for banking reasons counts as remitting the money into the state.

This means that while transferring the money is not taxable in itself it does open you upto capital gains tax on the gain which generated this money.

sakin

Hi Ciaran,

Thank you for the detailed explanation.

"you are liable for capital gains tax on any gains made on assets outside the state which are then remitted into the state"

I am not planning to send any gains to state. I will keep my gains in another country. I will just send the capital amount back to Ireland.

My gain tax will be paid in my home country and due to double taxation agreement I believe I don't need to pay tax 2nd time in Ireland.

But I just want to see my options to chose a path.

CIARAN_BOYLE

sakin wrote: »

Hi Ciaran,

Thank you for the detailed explanation.

"you are liable for capital gains tax on any gains made on assets outside the state which are then remitted into the state"

I am not planning to send any gains to state. I will keep my gains in another country. I will just send the capital amount back to Ireland.

My gain tax will be paid in my home country and due to double taxation agreement I believe I don't need to pay tax 2nd time in Ireland.

But I just want to see my options to chose a path.

How are you going to separate your capital sum when you are selling your bitcoin. Can you prove that the money coming into Ireland is capital only and that theres no gain in there?

Revenue tend to claim something is a gain rather than capital very easily to bring something into the scope of remittance basis of taxation.

I would advise a sit down with an Irish advisor to be certain what steps you can take to document and evidence that the money you are bringing into the country isn't a gain subject to the remittance basis of taxation.

sakin

CIARAN_BOYLE wrote: »

How are you going to separate your capital sum when you are selling your bitcoin. Can you prove that the money coming into Ireland is capital only and that theres no gain in there?

Yes. If I start from Ireland then it will be easy to prove. First I will send 20K from my all taxes paid Irish savings account to Germany. After sale is completed, I will send this 20K back to my Irish account.

CIARAN_BOYLE wrote: »

Revenue tend to claim something is a gain rather than capital very easily to bring something into the scope of remittance basis of taxation.

I would advise a sit down with an Irish advisor to be certain what steps you can take to document and evidence that the money you are bringing into the country isn't a gain subject to the remittance basis of taxation.

But I see that it doesn't worth to deal with Irish tax system just for 70 Euro fee and saving 1 extra day for transfer

Thank you very much for the comments and information, much appreciated.