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

ZeroThreat

the best thing is to keep as much detail and paperwork on every transaction as possible. As far as revenue is concerned the more detail the better.

Fakent.ie

GreeBo wrote: »

Why would you think selling btc and being paid in ltc isn't selling?
Why do you firmly believe they are distinguishing between some currencies and not others? Your exchange certainly doesn't.

You can hardly use the coins, this isnt stocks or forrex u can acctualy use those currencies when you sell them there isn't a special place to go to use my every crypto like if i go euro-yen-usd i can spend it in america

GreeBo

Fakent.ie wrote: »

You can hardly use the coins, this isnt stocks or forrex u can acctualy use those currencies when you sell them there isn't a special place to go to use my every crypto like if i go euro-yen-usd i can spend it in america

Sorry but you can buy things with crypto.
Also,, what can you buy with shares? Let I checked Dunnes weren't taking them.

Fakent.ie

GreeBo wrote: »

Sorry but you can buy things with crypto.
Also,, what can you buy with shares? Let I checked Dunnes weren't taking them.

Somone keeps mentioning euro to yen to usd and that those transactions are acctually taxed and comparing it to BTC to eth to LTC. but those are official countries currencies and accepted in hundreads and hundreads of places you go to an airport and you can swap your yen to euro and so on you can't go to an airport and swap your bitcoin to euro to use in europe thats just an example. tell me where you can use crypto i'd like to know

AlmightyCushion

Fakent.ie wrote: »

Somone keeps mentioning euro to yen to usd and that those transactions are acctually taxed and comparing it to BTC to eth to LTC. but those are official countries currencies and accepted in hundreads and hundreads of places you go to an airport and you can swap your yen to euro and so on you can't go to an airport and swap your bitcoin to euro to use in europe thats just an example. tell me where you can use crypto i'd like to know

What does that have to do with whether it's considered an asset or not? You can't bring copper to an airport and exchange it for silver but you still have to pay tax on it.

From Revenue's website:

You have to pay CGT on gains made from the sale, gift or exchange of an asset such as:

land
buildings (houses, apartments, or commercial property)
shares in companies (Irish-resident or non-resident)
assets that have no physical form such as goodwill, patents and copyright
currency (other than Irish currency)
assets of a trade
foreign life insurance policies and offshore funds
capital payments (in certain situations).

So if you are exchanging one asset for another, you have to pay CGT on it. You could classify crypto as an asset with no physical form. Therefore if you exchange one crypto for another you should pay CGT on it.

lifeandtimes

Fakent.ie wrote: »

tell me where you can use crypto i'd like to know

New cafe on aungier street accepts crypto, in fact thats their theme

https://m.facebook.com/pg/crypyocafedublin/about/?ref=page_internal&mt_nav=1

.G.

Cryptonovice wrote: »

If you want me to take screenshots and post here I will. If that is ok with the wider forum!

I'd like to see that. Be good to see how the questions were worded and how exactly they answered and to have all the official responses here. I'll be putting mine up when I get it too. I tried to word my questions so there could be no ambiguity in the response.

drunkmonkey

Is there any where to buy and sell bitcoins for cash? I'd assume people want to cash them in but not to go anywhere near their bank account.

That throws up another question, if you then transfer your cash bought bitcoin to your bank account who's to say you made any profit on it as it wasn't an investment just another way of taking payment for something.

lifeandtimes

drunkmonkey wrote: »

Is there any where to buy and sell bitcoins for cash? I'd assume people want to cash them in but not to go anywhere near their bank account.

That throws up another question, if you then transfer your cash bought bitcoin to your bank account who's to say you made any profit on it as it wasn't an investment just another way of taking payment for something.

1.You can use a bitcoin atm.

2. When it's flagged with revenue you have to prove where it came from and it would srill be a gain on an asset so liable for CGT

drunkmonkey

lifeandtimes wrote: »

1.You can use a bitcoin atm.

2. When it's flagged with revenue you have to prove where it came from and it would srill be a gain on an asset so liable for CGT

I'd forgotten about them, there probably charging market rates, I was thinking more like an adverts set up where people just want cash to keep them out of the financial system loop so would sell at a discount prices.

Found this not many for sale https://localbitcoins.com/buy-bitcoins-online/IE/ireland/?ch=hvpv

Cryptonovice

superg wrote: »

I'd like to see that. Be good to see how the questions were worded and how exactly they answered and to have all the official responses here. I'll be putting mine up when I get it too. I tried to word my questions so there could be no ambiguity in the response.

Trying to put it up but for some reason the paste function doesn't seem to be available on Boards?

Peregrinus

drunkmonkey wrote: »

That throws up another question, if you then transfer your cash bought bitcoin to your bank account who's to say you made any profit on it as it wasn't an investment just another way of taking payment for something.

You can't lodge a bitcoin in a conventional bank account. If it's a euro-denominated account, you can only lodge euros in it.

Peregrinus

Fakent.ie wrote: »

Somone keeps mentioning euro to yen to usd and that those transactions are acctually taxed and comparing it to BTC to eth to LTC. but those are official countries currencies and accepted in hundreads and hundreads of places you go to an airport and you can swap your yen to euro and so on you can't go to an airport and swap your bitcoin to euro to use in europe thats just an example. tell me where you can use crypto i'd like to know

It doesn't have to be capable of being exchanged everywhere in order to be an asset; it just has to be capable of being exchanged.

There are hundreds of shares which are listed on the London Stock Exchange, and only on the London Stock Exchange. The London Stock exchange is the only place in the world where you can trade those shares. Are those shares "assets" for CGT purposes? You bet they are.

Can crypto be exchanged? Yes. Even if there's only one place in the world where a particular crypto can be exchanged, that is not the foundation for an argument that this takes out outside the class of "assets" that are subject to CGT.

drunkmonkey

Peregrinus wrote: »

You can't lodge a bitcoin in a conventional bank account. If it's a euro-denominated account, you can only lodge euros in it.

Yes I meant the funds from the exchange. Think I found what I was after a prepaid debit card for spending coins, That takes you completely off the grid then.

barneystinson

drunkmonkey wrote: »

Is there any where to buy and sell bitcoins for cash? I'd assume people want to cash them in but not to go anywhere near their bank account.

That throws up another question, if you then transfer your cash bought bitcoin to your bank account who's to say you made any profit on it as it wasn't an investment just another way of taking payment for something.

Why would people not want it to go anywhere near their bank account?

drunkmonkey

barneystinson wrote: »

Why would people not want it to go anywhere near their bank account?

As you'd be liable for tax possibly, with a prepaid crypto card you can take out the money or spend it while keeping your anonymity if you've also bought your crypto with cash.

barneystinson

drunkmonkey wrote: »

As you'd be liable for tax possibly, with a prepaid crypto card you can take out the money or spend it while keeping your anonymity if you've also bought your crypto with cash.

So tax evasion?

You're liable for the tax whether or not it hits your bank account like...

drunkmonkey

barneystinson wrote: »

So tax evasion?

You're liable for the tax whether or not it hits your bank account like...

Just wanted to figure out how it worked.

Nobody knows you have it unless you tell them. So no liability.

barneystinson

drunkmonkey wrote: »

Just wanted to figure out how it worked.

Nobody knows you have it unless you tell them. So no liability.

Self assessed tax system. As a business owner / director you'll be familiar with that. Do you take the same attitude to dealing with all your tax affairs?

Peregrinus

drunkmonkey wrote: »

Yes I meant the funds from the exchange. Think I found what I was after a prepaid debit card for spending coins, That takes you completely off the grid then.

The whole point about cryptocurrency is that it is (originally) intended to be used, and is to some extent actually used, as currency. It's currency; just not currency backed by the government of any state. You can buy stuff with it, if you can find any seller willing to accept it, and at least in regard to the major cryptocurrencies, you can (or could, until they became so volatile).

So, no need for debit cards or ATMs or anything of the kind. You can transfer crypto from your account to your transaction counterparty's account, in return for which he sends you whatever it is you are buying from him.

This is becoming more and more difficult to do, though, simply because there are fewer people actually interested in accepting crypto in transactions. Transaction costs are high, settlements are slow and (as already mentione) the price volatility means that using crypto for trading purposes carries risks that can be avoided with more stable currencies. So most people who have stuff to sell would prefer to be paid in euros, US dollars, or whatever, thanks all the same.

Even if you can find someone willing to sell stuff, if your true motivation in acquiring crypto was to benefit from a rise in the price, the stuff they will sell may not be stuff you want to buy. When people fell they want to dispose of their investment, it's either because (a) they want to spend the proceeds on something, or (b) they think their investment has peaked in value, and they expect that for the future some other asset will be a better investment or otherwise has characteristics that appeal to them, so they want to acquire that asset. When people swap, say, BTC for ETH, that's an example of the second
kind of disposal. If that's what you want to do, you're not going to spend your BTC buying stuff; that would defeat the whole purpose of disposing of your BTC.

(Nor does it absolve you of your tax liablities. If you dispose of your BTC to buy stuff, and benefit from a large rise in value since you acquired it, that large rise in value is still subject to CGT or, if you are carrying on a trade, it's a profit of the trade and brought into charge to income tax.)

drunkmonkey

I know what it is, it's a currency which used to be a dollar but people are now trading like it's an investment vehicle. (I'm not that brave, can see it's use as money through)
When I mentioned debit cards I was referring to crypto specific ones that don't require ID registration for using. So your liable for nothing if your living in a cash world and the government don't have the slightest idea what you have and what your spending.

My investment money is in stocks etc and I've a tiny coinbase balance not worth taking about.

Just wanted to see how you can live outside the grid with crypto and have it figured out. It's not something I'm going to be doing.

Peregrinus

I don't know if anybody issues crypto debit cards but, if they do and if you had one, you'd be in the same position as if you had a euro debit card. You'd have a bitcoin account with some institution sufficiently established, and sufficiently regulated, that merchants (wishing to sell stuff for bitcoin) were prepared to enter into merchant agreements with them to accept debit cards issued by them.

I don't see any reaons to think that this would be any more off-grid than a euro debit card, to be honest. What institution do you envisage could or would issue bitcoin debit cards that would be widely accepted? And why would that institution be beyond the scope of the Revenue's notice?

barneystinson

drunkmonkey wrote: »

I know what it is, it's a currency which used to be a dollar but people are now trading like it's an investment vehicle. (I'm not that brave, can see it's use as money through)
When I mentioned debit cards I was referring to crypto specific ones that don't require ID registration for using. So your liable for nothing if your living in a cash world and the government don't have the slightest idea what you have and what your spending.

My investment money is in stocks etc and I've a tiny coinbase balance not worth taking about.

Just wanted to see how you can live outside the grid with crypto and have it figured out. It's not something I'm going to be doing.

Well this cash world idea is a bit of a fallacy.
Have a car? How did/do you finance the purchase & running of it?
Live in accommodation somewhere? Same questions.
Eat food? Same questions.
Wear clothes? Same questions.
Holiday abroad? Same questions.

A genuinely off the grid life involves being a completely self sufficient hermit in the wilds somewhere, and cryptocurrencies are of no relevance.

To the ordinary joe soap, they can take a flyer at not getting caught out if they've an insignificant amount of crypto/gains, but if they've significant wealth in crypto, the enjoyment of that wealth is likely to intersect with the grid in ways that expose one to being caught out and penalised.

A 100% penalty on a 33% tax, equates to 66% of your gain. Interest at about 11% p.a. means you'd better hope they catch you sooner rather than later.

drunkmonkey

There pre paid cards like swirl etc there's plenty your can sign up to and some with lax enough criteria like not requiring ID. You can transfer from your wallet directly to them so your avoiding and institution or record of you even buying anything.
They can be used in most ATMs. Like this https://cryptopay.me/bitcoin-debit-card
From what I can see you won't be traceable.

drunkmonkey

barneystinson wrote: »

Well this cash world idea is a bit of a fallacy.
Have a car? How did/do you finance the purchase & running of it?
Live in accommodation somewhere? Same questions.
Eat food? Same questions.
Wear clothes? Same questions.
Holiday abroad? Same questions.

A genuinely off the grid life involves being a completely self sufficient hermit in the wilds somewhere, and cryptocurrencies are of no relevance.

To the ordinary joe soap, they can take a flyer at not getting caught out if they've an insignificant amount of crypto/gains, but if they've significant wealth in crypto, the enjoyment of that wealth is likely to intersect with the grid in ways that expose one to being caught out and penalised.

A 100% penalty on a 33% tax, equates to 66% of your gain. Interest at about 11% p.a. means you'd better hope they catch you sooner rather than later.

Your doing all that with the money from your work. Revenue wouldn't have a clue you bought some new shoes etc. Significant wealth would be harder hide but that's only if you start showboating but once you've got the money out there's nothing stopping you going buying some Krugerrands and turning them into cash as you need them again nobody knows. You can do that at the minute anyway with coins it's just there not appreciating as quick or depreciating which ever the case may be.

I know that the penalties are I pay my taxes.

Peregrinus

drunkmonkey wrote: »

There pre paid cards like swirl etc there's plenty your can sign up to and some with lax enough criteria like not requiring ID. You can transfer from your wallet directly to them so your avoiding and institution or record of you even buying anything.
They can be used in most ATMs. Like this https://cryptopay.me/bitcoin-debit-card
From what I can see you won't be traceable.

Your transactions are traceable, since they're electronically effected and recorded, and they must be processed through the major payments systems/networks - Visa, Mastercard, etc. If you can buy the card over the counter with cash then it would follow that your transactions can't be linked to you, but the sale of the cards and/or their acceptance by merchants could easily be regulated by law if it became apparent that they were being used as tax avoidance mechanisms on any signficant scale; money-laundering know-your-customer type requirements could be applied to regulated card issuers, and merchants could be forbidden from accepting cards not issued by regulated issuers.

None of these regulations are in place at the moment, of course, but that doesn't open up even short-term opportunities to dispose of bitcoin off-grid, since SFAIK nobody issues bitcoin debit cards, and there certainly aren't many merchants accepting them.

drunkmonkey

I just linked you to one, they do exist just have a Google for crypto debit cards.
Yes the transactions are recorded but they don't know who's making them as it's a pre paid card with a made up name and a crypto wallet the revenue doesn't have access to or even knows it exits and is owned by someone in Ireland.

Peregrinus

drunkmonkey wrote: »

I just linked you to one, they do exist just have a Google for crypto debit cards.
Yes the transactions are recorded but they don't know who's making them as it's a pre paid card with a made up name and a crypto wallet the revenue doesn't have access to or even knows it exits and is owned by someone in Ireland.

What you have linked me to is a debit card denominated in either euros, US dollars or sterling, which can be purchased, and then topped up, with funds from your bitcoin wallet. It's "accepted anywhere major cards are", which tells you it's plugged in to the establishment payment settlement networks. And you'll notice this nugget in the small print:

"In accordance with the French law, residents of France must be verified (KYC2 only) and are restricted to ATM cash withdrawals of €1,000 per month and a maximum balance of €10,000".

So, the French authorities are on to this already. Others will doubtless follow, if it catches on and is perceived to be used as a tax avoidance mechanism. (The transaction fees set out on the page are eye-watering, which makes me suspect that it won't catch on very much.)

Could it, in principle, be used as a tax avoidance mechanism? Yes, I think, but so could a conventional debit card, used to spend the proceeds of a convention asset that you sold for a sum of euros that you then deposited offshore. The spending of the sale proceeds is not a taxable event; it's the disposal of the asset that is the taxable event, and while it's always possible to conceal the disposal of an asset by simply never declaring it, that's not something that can be guaranteed to work reliably.

Noctifer

The lack of information regarding crypto here makes me less and less willing to actually pay taxes. Especially the day trading part. With all the money they are getting could't the setup a proper guide on how to do everything and even do things like tools for calculating taxes from exchange info.

I will be contacting an accountant soon, if the answers I get are not good revenue won't see a single cent.

Peregrinus

Noctifer wrote: »

The lack of information regarding crypto here makes me less and less willing to actually pay taxes. Especially the day trading part. With all the money they are getting could't the setup a proper guide on how to do everything and even do things like tools for calculating taxes from exchange info.

I will be contacting an accountant soon, if the answers I get are not good revenue won't see a single cent.

It's not the Revenue's job to do your tax compliance for you. One of the points about a self-assessment system is that it gives the taxpayer a high degree of control, but also a high degree of responsibility.

I disagree that there's a lack of information here. The CGT rules are well-established, and fairly clear and fairly consistent. Some doubt is being spread in this thread by people who don't like those rules and their outcome, and who are insisting that because crypto isn't exactly like any particular existing asset, therefore the CGT rules don't apply. But, really, if you look through this for the nonsense that it is and just apply established CGT principless, this isn't difficult. It's a pain, if you have entered into a large number of transactions, but tax compliance is always a pain if you have a large number of transactions.