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Tax issues - how will Revenue know?

  • 09-01-2018 7:40pm
    #1
    Closed Accounts Posts: 805 Anthracite


    Just wondering how Revenue would know that you have made money (or not, of course) buying and selling cryptocurrency? The bank might see some money going out to Coinbase, or coming in to Coinbase (or similar) - will they pass that information on to Revenue?

    I'm not advocating dodging taxes here - I'd be very happy to be in a position to have to pay them. But I'm still wondering how Revenue could get a handle on who owes what.


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Comments

  • Moderators, Music Moderators Posts: 19,597 Mod ✭✭✭✭ Mr.S
    Moderator


    When you convert back to € and lodge to your bank account.


  • Closed Accounts Posts: 805 Anthracite


    Mr.S wrote: »
    When you convert back to € and lodge to your bank account.
    ...what happens? That's what I'm wondering.


  • Registered Users Posts: 2,903 ✭✭✭ Blacktie.
    Registered User


    Anthracite wrote:
    ...what happens? That's what I'm wondering.


    Bank notifies revenue of any lodgement over 5k I believe. Most likely won't flag anything for them but if you're dumping in a lot of money and you get audited and didn't pay your taxes you'll be in for a hefty fine.


  • Registered Users Posts: 3,283 ✭✭✭ Bandara
    Registered User


    My friend has opened an account in Poland, with his friend who is polish.

    When my friend is cashing out larger sums he goes to Poland and withdraws the money from his bank, and he flies back to Ireland with €9990 in cash that he won gambling in Poland. And his two or three friends that come with him for a freebie for the weekend would also win gambling in Poland

    Merrion Vaults at €240 for their smallest safe deposit box whos contents will never be checked by anyone except the owner, and that owners name will never be disclosed to anyone except under High Court order. a €240 storage box is of adequate size to store approx 80k in €50 notes.

    etc etc

    Also my friend has a management accountant that he uses, the accountant is confident that sums up to 100k would not particularly raise a flag with revenue, they are not unusual amounts to be transferred around. However he is of the opinion that in the future the Revenue will eventually get the data from the exchanges of their clients based in Ireland. So, he advised my friend to use small Chinese oddball exchanges and withdraw from them as they will most likely be not around or not responsive to requests in the future.

    Anyways, I personally would always advocate paying taxes as its just not worth the risk.


  • Moderators, Music Moderators Posts: 19,597 Mod ✭✭✭✭ Mr.S
    Moderator


    Anthracite wrote: »
    ...what happens? That's what I'm wondering.

    Bank flags large deposits with revenue
    Revenue eventually follows up
    Large fines if you haven’t paid the correct tax

    Any future lender will also question large deposits and you will need declare the source / show appropriate tax was paid.


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  • Registered Users Posts: 1,458 ✭✭✭ Tinder Surprise
    Registered User


    Bandara wrote: »
    My friend has opened an account in Poland, with his friend who is polish.

    When my friend is cashing out larger sums he goes to Poland and withdraws the money from his bank, and he flies back to Ireland with €9990 in cash that he won gambling in Poland. And his two or three friends that come with him for a freebie for the weekend would also win gambling in Poland

    Merrion Vaults at €240 for their smallest safe deposit box whos contents will never be checked by anyone except the owner, and that owners name will never be disclosed to anyone except under High Court order. a €240 storage box is of adequate size to store approx 80k in €50 notes.

    etc etc

    Also my friend has a management accountant that he uses, the accountant is confident that sums up to 100k would not particularly raise a flag with revenue, they are not unusual amounts to be transferred around. However he is of the opinion that in the future the Revenue will eventually get the data from the exchanges of their clients based in Ireland. So, he advised my friend to use small Chinese oddball exchanges and withdraw from them as they will most likely be not around or not responsive to requests in the future.

    Anyways, I personally would always advocate paying taxes as its just not worth the risk.

    Is the Polish bank account in his name, or the friends?


  • Moderators, Music Moderators Posts: 19,597 Mod ✭✭✭✭ Mr.S
    Moderator


    Bandara wrote: »
    My friend has opened an account in Poland, with his friend who is polish.

    When my friend is cashing out larger sums he goes to Poland and withdraws the money from his bank, and he flies back to Ireland with €9990 in cash that he won gambling in Poland. And his two or three friends that come with him for a freebie for the weekend would also win gambling in Poland

    Merrion Vaults at €240 for their smallest safe deposit box whos contents will never be checked by anyone except the owner, and that owners name will never be disclosed to anyone except under High Court order. a €240 storage box is of adequate size to store approx 80k in €50 notes.

    etc etc

    Also my friend has a management accountant that he uses, the accountant is confident that sums up to 100k would not particularly raise a flag with revenue, they are not unusual amounts to be transferred around. However he is of the opinion that in the future the Revenue will eventually get the data from the exchanges of their clients based in Ireland. So, he advised my friend to use small Chinese oddball exchanges and withdraw from them as they will most likely be not around or not responsive to requests in the future.

    Anyways, I personally would always advocate paying taxes as its just not worth the risk.

    The stress of all that and then have to live off cash? 33% tax sounds appealing :D


  • Registered Users Posts: 3,283 ✭✭✭ Bandara
    Registered User


    Is the Polish bank account in his name, or the friends?

    the account is a joint account and needs the two signatures to withdraw apparently, the friend was required to open an account in Poland without the Irish man having residential status there

    the friend is happy with his arrangement, he gets a free trip home and a cash %


  • Registered Users Posts: 3,283 ✭✭✭ Bandara
    Registered User


    Mr.S wrote: »
    The stress of all that and then have to live off cash? 33% tax sounds appealing :D

    Oh I don't know. Krakow is quite nice I hear, and the strippers do happy hour specials

    :P


  • Registered Users Posts: 547 ✭✭✭ Soulsun
    Registered User


    Bandara wrote: »
    My friend has opened an account in Poland, with his friend who is polish.

    When my friend is cashing out larger sums he goes to Poland and withdraws the money from his bank, and he flies back to Ireland with €9990 in cash that he won gambling in Poland. And his two or three friends that come with him for a freebie for the weekend would also win gambling in Poland

    Merrion Vaults at €240 for their smallest safe deposit box whos contents will never be checked by anyone except the owner, and that owners name will never be disclosed to anyone except under High Court order. a €240 storage box is of adequate size to store approx 80k in €50 notes.

    etc etc

    Also my friend has a management accountant that he uses, the accountant is confident that sums up to 100k would not particularly raise a flag with revenue, they are not unusual amounts to be transferred around. However he is of the opinion that in the future the Revenue will eventually get the data from the exchanges of their clients based in Ireland. So, he advised my friend to use small Chinese oddball exchanges and withdraw from them as they will most likely be not around or not responsive to requests in the future.

    Anyways, I personally would always advocate paying taxes as its just not worth the risk.

    So tax avoidance in Poland.


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  • Moderators, Music Moderators Posts: 19,597 Mod ✭✭✭✭ Mr.S
    Moderator


    Bandara wrote: »
    the account is a joint account and needs the two signatures to withdraw apparently, the friend was required to open an account in Poland without the Irish man having residential status there

    the friend is happy with his arrangement, he gets a free trip home and a cash %

    Polish bank would pass on details of the Irish resident to Revenue, no? Presumably a passport and address was needed.


  • Closed Accounts Posts: 280 ✭✭ Damiencm


    Blacktie. wrote:
    Bank notifies revenue of any lodgement over 5k I believe. Most likely won't flag anything for them but if you're dumping in a lot of money and you get audited and didn't pay your taxes you'll be in for a hefty fine.


    I find this difficult to believe.. but of course open to correction. I would have thought that there are thousands if not tens of thousands of transactions carried out every single day in Ireland of €5k or more. Both personal and business


  • Registered Users Posts: 1,458 ✭✭✭ Tinder Surprise
    Registered User


    Bandara wrote: »
    the account is a joint account and needs the two signatures to withdraw apparently, the friend was required to open an account in Poland without the Irish man having residential status there

    the friend is happy with his arrangement, he gets a free trip home and a cash %

    I like your 'friend' :)


  • Closed Accounts Posts: 2,021 lifeandtimes


    Damiencm wrote: »
    I find this difficult to believe.. but of course open to correction. I would have thought that there are thousands if not tens of thousands of transactions carried out every single day in Ireland of €5k or more. Both personal and business

    Yeah I find that hard to believe. Anyone could get a loan from the credit union loan of 6k and above and pop it into their bank account


  • Registered Users Posts: 430 ✭✭ Robert McGrath
    Registered User


    Soulsun wrote: »
    So tax avoidance in Poland.

    “Avoidance” sounds like something of a euphemism


  • Moderators, Society & Culture Moderators Posts: 25,535 Mod ✭✭✭✭ Dades
    Would you like to know more?


    That would be evasion, surely.


  • Moderators, Music Moderators Posts: 19,597 Mod ✭✭✭✭ Mr.S
    Moderator


    Yeah I find that hard to believe. Anyone could get a loan from the credit union loan of 6k and above and pop it into their bank account

    And that’s totally normal, no one would bat an eyelid.

    Large deposits from overseas is another story.


  • Closed Accounts Posts: 280 ✭✭ Damiencm


    Mr.S wrote:
    Large deposits from overseas is another story.


    True but I still wouldn't consider E5k to be large even if it is from overseas.

    For sure a Bank itself may get suspicious from an Anti Money Laundering perspective if E5k is suddenly being dropped into an account a few times a week from abroad but reasonable sums of say E5k to E15k a handful of times throughout the year will hardly be picked up upon.

    I guess the op's post is fairly open and it depends on how large your profits are :-D


  • Banned (with Prison Access) Posts: 1,648 Autochange
    Banned


    Bandara wrote: »
    My friend has opened an account in Poland, with his friend who is polish.

    When my friend is cashing out larger sums he goes to Poland and withdraws the money from his bank, and he flies back to Ireland with €9990 in cash that he won gambling in Poland. And his two or three friends that come with him for a freebie for the weekend would also win gambling in Poland

    Merrion Vaults at €240 for their smallest safe deposit box whos contents will never be checked by anyone except the owner, and that owners name will never be disclosed to anyone except under High Court order. a €240 storage box is of adequate size to store approx 80k in €50 notes.

    etc etc

    Also my friend has a management accountant that he uses, the accountant is confident that sums up to 100k would not particularly raise a flag with revenue, they are not unusual amounts to be transferred around. However he is of the opinion that in the future the Revenue will eventually get the data from the exchanges of their clients based in Ireland. So, he advised my friend to use small Chinese oddball exchanges and withdraw from them as they will most likely be not around or not responsive to requests in the future.

    Anyways, I personally would always advocate paying taxes as its just not worth the risk.

    Your friend sounds like an intelligent chap.


  • Registered Users Posts: 2,072 ✭✭✭ ZeroThreat
    Registered User


    Bandara wrote: »
    My friend has opened an account in Poland, with his friend who is polish.

    When my friend is cashing out larger sums he goes to Poland and withdraws the money from his bank, and he flies back to Ireland with €9990 in cash that he won gambling in Poland. And his two or three friends that come with him for a freebie for the weekend would also win gambling in Poland

    Merrion Vaults at €240 for their smallest safe deposit box whos contents will never be checked by anyone except the owner, and that owners name will never be disclosed to anyone except under High Court order. a €240 storage box is of adequate size to store approx 80k in €50 notes.

    etc etc

    Also my friend has a management accountant that he uses, the accountant is confident that sums up to 100k would not particularly raise a flag with revenue, they are not unusual amounts to be transferred around. However he is of the opinion that in the future the Revenue will eventually get the data from the exchanges of their clients based in Ireland. So, he advised my friend to use small Chinese oddball exchanges and withdraw from them as they will most likely be not around or not responsive to requests in the future.

    Anyways, I personally would always advocate paying taxes as its just not worth the risk.

    In a couple of years, even large exchanges such as coinbase may shut down to be replaced by better technological solutions and people may be able to sell and buy any type of cryptocurrency directly (ie. the Ethos project for example), so records may extremely difficult or impossible for a foreign government of a tiny country such as Ireland to obtain.

    Its all just speculation, but the speed of change in crypto is faster than legislation can keep up. As you say paying the third to the revenue is the most prudent course of action and makes for nights of restful sleep.


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  • Registered Users Posts: 2,649 ✭✭✭ Whelo79
    Registered User


    ZeroThreat wrote: »
    In a couple of years, even large exchanges such as coinbase may shut down to be replaced by better technological solutions and people may be able to sell and buy any type of cryptocurrency directly (ie. the Ethos project for example), so records may extremely difficult or impossible for a foreign government of a tiny country such as Ireland to obtain.

    Its all just speculation, but the speed of change in crypto is faster than legislation can keep up. As you say paying the third to the revenue is the most prudent course of action and makes for nights of restful sleep.

    I believe the Stellar/FairX partnership is doing something like this. Using Lumens as the base currency and able to transfer between any coin and/or fiat currency.


  • Registered Users Posts: 2,072 ✭✭✭ ZeroThreat
    Registered User


    Whelo79 wrote: »
    I believe the Stellar/FairX partnership is doing something like this. Using Lumens as the base currency and able to transfer between any coin and/or fiat currency.

    The death of creaky old dinosaurs such as coinbase is to be welcomed anyway. It breaks down under the strain of all the transactions at times of extremely high volatility as we know well.


  • Registered Users Posts: 6,306 ✭✭✭ EagererBeaver
    Registered User


    Not without market ready replacements it's not.


  • Registered Users Posts: 2,649 ✭✭✭ Whelo79
    Registered User


    Not without market ready replacements it's not.

    FairX beta testing starts early February.


  • Registered Users Posts: 3,855 ✭✭✭ relax carry on
    Registered User


    Soulsun wrote: »
    So tax avoidance in Poland.

    Evasion not avoidance. Big difference. And it's evasion in Ireland as the taxpayer is I'm assuming resident in Ireland.


  • Registered Users Posts: 3,855 ✭✭✭ relax carry on
    Registered User


    Mr.S wrote: »
    Polish bank would pass on details of the Irish resident to Revenue, no? Presumably a passport and address was needed.

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


  • Registered Users Posts: 3,855 ✭✭✭ relax carry on
    Registered User


    Damiencm wrote: »
    I find this difficult to believe.. but of course open to correction. I would have thought that there are thousands if not tens of thousands of transactions carried out every single day in Ireland of €5k or more. Both personal and business

    http://www.irishstatutebook.ie/eli/2010/act/6/section/42/enacted/en/html


  • Registered Users Posts: 2,072 ✭✭✭ ZeroThreat
    Registered User


    Evasion not avoidance. Big difference. And it's evasion in Ireland as the taxpayer is I'm assuming resident in Ireland.

    yeah cashing out abroad and claiming the money as gambling winnings - very Bertie-esque if you ask me. :cool:

    Is there not a possibility of a demand for proof via producing betting slips?
    Even criminals in Ireland trying to launder money through the bookies were asked for those in the past.


  • Registered Users Posts: 3,855 ✭✭✭ relax carry on
    Registered User


    ZeroThreat wrote: »
    yeah cashing out abroad and claiming the money as gambling winnings - very Bertie-esque if you ask me. :cool:

    Is there not a possibility of a demand for proof via producing betting slips?
    Even criminals in Ireland trying to launder money through the bookies were asked for those in the past.


    https://www.revenue.ie/en/importing-vehicles-duty-free-allowances/travelling-with-cash/index.aspx

    Anything above 1000 euro cash can be detained if suspected that its proceeds of crime.


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  • Registered Users Posts: 25,615 ✭✭✭✭ GreeBo
    Registered User


    ZeroThreat wrote: »
    yeah cashing out abroad and claiming the money as gambling winnings - very Bertie-esque if you ask me. :cool:

    Is there not a possibility of a demand for proof via producing betting slips?
    Even criminals in Ireland trying to launder money through the bookies were asked for those in the past.

    If they can find you have one in the Cayman Islands, I'm pretty sure they can find you have a bank account in Poland!


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