Working full time but being paid in cryptocurrency for part time job

sexmag

Hi,

Just a quick query.

Im currently working full time here in ireland and have been doing part time work with a cryptocurrency company based in germany for free with the view of being paid down the line in their cryptocurency.

Im wondering when i get paid do i have to pay income tax or capital gains tax?

Thanks

dennyk

This document covers Revenue's stance on cryptocurrencies. Basically if you're paid in crypto as an employee or self-employed, you'll pay income tax on the equivalent Euro value like normal.

jim-mcdee

yea, income tax. if you feel like it.

sexmag

Thanks for your replies

So I just file a income tax return and that should be good then?

I guess I'd fall under contracted instead of self employed then? But I doubt I'll get a payslip however that still is too be confirmed

ThumbTaxed

jim-mcdee wrote: »

yea, income tax. if you feel like it.

Is it optional?

sexmag

ThumbTaxed wrote: »

Is it optional?

Well income tax is 20 odd percent on the first 2800 and then 40 there after.

Capital gains tax is 33% after the first 1200 or so meaning it may work out better to do CGT depending how much I'm earning but I don't want to get in trouble with revenue

ArthurG

sexmag wrote: »

Well income tax is 20 odd percent on the first 2800 and then 40 there after.

Capital gains tax is 33% after the first 1200 or so meaning it may work out better to do CGT depending how much I'm earning but I don't want to get in trouble with revenue

I don’t think you can ‘do’ CGT as you described. If you could we’d all do so to avail of the lower rate versus PAYE. If it’s income I’d have assumed you pay at the full rate on the euro equivalent, and then for any appreciation in value you'd get stung for CGT. At least that what I’d assume.....

As for whether or not you declare it, that’s your choice, but Revenue as highly effective at tracking this kind of thing down, and if you lie to the, you’re at risk of serious penalties.

dennyk

Earned income is earned income and capital gains are capital gains; they are distinct sources of income and there is no overlap. You can't "choose" to treat some income as a capital gain if it isn't, just like you can't choose to treat a capital gain as ordinary income; doing so would be tax fraud. There can sometimes be ways to structure your transactions and assets in such a way as to (legally) reduce your tax liability in certain complex scenarios, but generally speaking there's no way to take money that you were paid for work you performed for an employer and call it a capital gain. Even if your employer were to "gift" you, say, a bunch of Bitcoin, it would be treated as a benefit in kind and you'd be required to pay income tax/USC/PRSI on the value of it accordingly.

ThumbTaxed

ArthurG wrote: »

sexmag wrote: »

Well income tax is 20 odd percent on the first 2800 and then 40 there after.

Capital gains tax is 33% after the first 1200 or so meaning it may work out better to do CGT depending how much I'm earning but I don't want to get in trouble with revenue

I don’t think you can ‘do’ CGT as you described. If you could we’d all do so to avail of the lower rate versus PAYE. If it’s income I’d have assumed you pay at the full rate on the euro equivalent, and then for any appreciation in value you'd get stung for CGT. At least that what I’d assume.....

As for whether or not you declare it, that’s your choice, but Revenue as highly effective at tracking this kind of thing down, and if you lie to the, you’re at risk of serious penalties.

Who says?

ThumbTaxed

ArthurG wrote: »

sexmag wrote: »

Well income tax is 20 odd percent on the first 2800 and then 40 there after.

Capital gains tax is 33% after the first 1200 or so meaning it may work out better to do CGT depending how much I'm earning but I don't want to get in trouble with revenue

I don’t think you can ‘do’ CGT as you described. If you could we’d all do so to avail of the lower rate versus PAYE. If it’s income I’d have assumed you pay at the full rate on the euro equivalent, and then for any appreciation in value you'd get stung for CGT. At least that what I’d assume.....

As for whether or not you declare it, that’s your choice, but Revenue as highly effective at tracking this kind of thing down, and if you lie to the, you’re at risk of serious penalties.

Who says?

barneystinson

ThumbTaxed wrote: »

Who says?

Who says what?

The J Stands for Jay

You will have to pay income tax on the euro equivalent of the bitcoin you are paid (same as if they paid you in gold or coal or molasses). You will then be liable to capital gains tax on any appreciation in value of the bitcoin between when you acquire it and when you dispose of it.

sexmag

McGaggs wrote: »

You will have to pay income tax on the euro equivalent of the bitcoin you are paid (same as if they paid you in gold or coal or molasses). You will then be liable to capital gains tax on any appreciation in value of the bitcoin between when you acquire it and when you dispose of it.

To play devils advocate what if I was paid,transferred them to my spouse and then paid income tax on the euro value of then at the time I was given them,would capital gains still need to be paid?

Mooooo

sexmag wrote: »

To play devils advocate what if I was paid,transferred them to my spouse and then paid income tax on the euro value of then at the time I was given them,would capital gains still need to be paid?

Yes by your spouse on the increase in value from when she would have acquired them

The J Stands for Jay

sexmag wrote: »

To play devils advocate what if I was paid,transferred them to my spouse and then paid income tax on the euro value of then at the time I was given them,would capital gains still need to be paid?

There would be no CGT on the transfer to your spouse, but they would pay, on disposal, CGT on the gain in value from the date you acquired them.