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Capital Gains tax-Crypto?
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I agree that double-taxing wouldn’t be reasonable in principle, but I wouldn’t assume anything when it comes to waiving tax liabilities. I only believe it when I see it black on white.
I think it depends on the DTA in question..
For example, the Australian one says;The Government of Ireland and the Government of Australia, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains,
It's likely that that could happen in come locations. But the taxes would compound, rather than be added together.However based on Irish law you are still liable for 33% Irish CGT *as well* for the 3 years after leaving Ireland and I don’t see anything in the tax treaty saying this is waived. I.e. a total of 63% CGT (30% to the French taxman and 33% to the Irish one).
Ie the tax in the first, would reduce your gain for tax purposed in the second.
As you lose a 1/3 to Ireland, the 30% in France only applies to the 2/3. This makes it an effective 20% (2/3 of 30%). 53% is still horrendous, bit not a bad as 63%.
You just couldn't realise and gains during those years only than exempt amounts.0 -
Does Koinly give a good enough output
to enable all Revenue forms to be filled easily at the end of the year ? I obviously cannot determine that without paying the fee.0 -
Chris_5339762 wrote: »How much detail do they want? Thats also an interesting though. Like, would they be happy if you declared the amount based on some Excel calcs done purely off say, the Kraken ledger?
Just out of interest, I don’t think this got an answer but its exactly what I’m doing. I have a spreadsheet which takes outputs from Gemini and etoro. I’ve worked on it to the best of my ability but honestly the complexity of is quite astounding, I think it’s possible that it has quite a few errors in there even though I’ve tried my best to make it workable. I suspect that even the taxman wouldn’t be able to calculate the tax 100% accurately though as in particular etoro has thousands of transactions in it, hundreds in a day at some points. I haven’t cracked the vagaries of etfs and how to apply the tax from them yet either. I’m going to keep working on this as best I can, likely that it’s not going to be needed this year anyway, but does revenue expect this kind of detail or do they simply expect everyone to use an accountant?0 -
For something like crypto, I would think that as long as you apply a reasonable valuation basis to give euro values for your acquisition costs and disposal proceeds, and so long as you apply that basis consistently to your acquisitions and disposals alike, I don't think you'll get any grief from the Revenue.
This issue already arises for people who deal in foreign currencies, the prices of which fluctuate moment by moment throughout the day. If you're reporting a transaction, one side or other of which involves euro, of course assigning a euro value is straightforward. But if you use one foreign currency to buy another, do you have to value that according to the euro exchange rate that applied at the instant the transaction was effected? No, you don't. You can, e.g., value those at the closing price for the day, which is easily ascertainable.0 -
They can barely use emails, still in fax age, you think they have the ability to go through 1000's of transactions from defi to cen exchanges for 1 user?
I work in a government department, they are not even remotely capable of doing what you suggest here
I still declare myself but unless you are pumping 1000's into your bank account you are not on their radar
U must work in the Hse! Haha
revenues systems and staff are well very capable at doing their job, it’s the one dept that the govt places a lot of focus on ...0 -
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Peregrinus wrote: »For something like crypto, I would think that as long as you apply a reasonable valuation basis to give euro values for your acquisition costs and disposal proceeds, and so long as you apply that basis consistently to your acquisitions and disposals alike, I don't think you'll get any grief from the Revenue.
This issue already arises for people who deal in foreign currencies, the prices of which fluctuate moment by moment throughout the day. If you're reporting a transaction, one side or other of which involves euro, of course assigning a euro value is straightforward. But if you use one foreign currency to buy another, do you have to value that according to the euro exchange rate that applied at the instant the transaction was effected? No, you don't. You can, e.g., value those at the closing price for the day, which is easily ascertainable.
That’s interesting, I calculate the euro exchange at the buy and sell point of each asset using the central banks daily exchange rate. It doesn’t take into account the actual initial deposit into USD though, I’m at a loss how I would do that so I’ve just left that bit out!0 -
Hi Guys
Just have a question.... im sorry if its been asked before.
If i sell my crypto at a loss , and then buy back in , can i use that loss to write off against future gains ?
is there a period i have to wait to buy back in?0 -
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I think the 4 weeks rule applies to shares that have been held for less than 4 weeks? They don’t count against losses. Unless there is another rule I’ve missed.
https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/selling-or-disposing-of-shares.aspx0 -
I think the 4 weeks rule applies to shares that have been held for less than 4 weeks? They don’t count against losses. Unless there is another rule I’ve missed.
https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/selling-or-disposing-of-shares.aspx
Yeah this came up last week.
The one on revenue only described transactions in one way. The does the paragraph in the actual law.
But further down it’s described in the opposite way.
Also applies if a husband and wife buying/sell within 4 weeks.0 -
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Yeah this came up last week.
The one on revenue only described transactions in one way. The does the paragraph in the actual law.
But further down it’s described in the opposite way.
Also applies if a husband and wife buying/sell within 4 weeks.
To me it reads that if you buy and sell a share within a 4 week period then you can't use the loss to offset against your taxes, unless you buy back the same shares within another 4 week period after selling.0 -
To me it reads that if you buy and sell a share within a 4 week period then you can't use the loss to offset against your taxes, unless you buy back the same shares within another 4 week period after selling.
That is what that link to revenue says.
But it’s not the full extent of the law.0 -
I think it depends on the DTA in question..
For example, the Australian one says;
Yes it seems to be inconsistent. But it seems to indicate that the goal of the 3 years rule isn't to prevent tax optimisation (or at least not only). I picked France because it isn't exactly a tax heaven (more like a tax hell). So no-one goes there for the purpose of avoiding Irish tax and there is no good reason to double-tax anyone moving there.It's likely that that could happen in come locations. But the taxes would compound, rather than be added together.
Ie the tax in the first, would reduce your gain for tax purposed in the second.
As you lose a 1/3 to Ireland, the 30% in France only applies to the 2/3. This makes it an effective 20% (2/3 of 30%). 53% is still horrendous, bit not a bad as 63%.
You just couldn't realise and gains during those years only than exempt amounts.
This is a big assumption to make IMO and probably would need to be tested in French and Irish courts.
From the perspective of the taxpayer involved, of course I understand where you are coming from. But if you do as you suggest and only file gains in France after deducing the Irish tax, I doubt French tax authorities will agree to coming second and thus not getting their full 30% of the actual gains (especially if you are a tax resident in France - it is not their problem that another country you are not living in still wants to tax you, why would they accept to come after that country?).
And if you do it the other way around Revenue might not like not getting their full 33% either.
But in any case even if you could do as you suggest, it would still be shameless double-taxation and nothing to do with preventing tax optimisation.0 -
Countries don't primarily structure their tax laws on matters like residents departing with a view to preventing tax optimisation, but simply with a view to collecting the tax that (they feel) is their due. If they would levy tax on someone who has recently left for the British Virgin Island, then they will levy tax on someone who has recently left for France. The issue is not the moral or political views that might be formed about the country you have moved to; it's your connection with the country you have moved from. And that is the same in both cases.
When it comes to CGT, the feeling is that where the gain has accrued while you were resident in Ireland, the fact that you leave the country just before realising the gain doesn't mean that Ireland shouldn't seek to tax it. Hence the ordinary residence rule.
On the double tax agreement thing, older DTAs tend not to cover capital gains tax because, until relatively recently, many countries did not have a distinct capital gains tax; they taxed gains as income or they didn't tax them at all. Newer tax treaties do cover CGT. The Ireland/France DTA dates from 1968, when we didn't have a capital gains tax. Ireland has an active programme for updating its DTAs but of course this requires co-operation from the other countries involved. It's possible that this isn't a priority for France.
Where you don't have a double taxation agreement, or where you have one but it doesn't cover CGT, the Irish approach is to treat any tax levied on the disposal in your country of residence as part of the costs of disposal. So, you're living in France. You sell your shares for (say) €10,000, of which (say) €4,000 represents a gain. You pay a 1% commission (€100) to the broker; that's deductible, so it reduced your gain to €3,900. You pay 30% tax (€1,170) in France on that; that's also deductible for Irish CGT purposes, so it brings your chargeable gain down to €2,730, and Irish CGT is calculated on that amount.
The legal authority for this is Taxes Consolidation Act 19987 s. 282(4):. . . the tax chargeable under the law of any country outside the State on the disposal of an asset which is borne by the person making the disposal shall be allowable as a deduction in the computation . . . of the gain accruing on the disposal.0 -
As pointed out above, the DTA were all written at various times, laws they covered changed in the interim. Plus the intention of all DTA is not necessarily the same anyway.Yes it seems to be inconsistent. But it seems to indicate that the goal of the 3 years rule isn't to prevent tax optimisation (or at least not only). I picked France because it isn't exactly a tax heaven (more like a tax hell). So no-one goes there for the purpose of avoiding Irish tax and there is no good reason to double-tax anyone moving there.This is a big assumption to make IMO and probably would need to be tested in French and Irish courts.
I don't think it does require testing in court. It's cover under general tax laws.
Whether the 33% or the 30% is applied first, the outcome the the same c.53%.
The Irish tax is charge on the gains. If the process of trading in shares involves a 30% tax. Then that is a cost involved for the individual and clearly impacts any gain.
Who comes first is really a matter for the relevant revenues departments to sort out. If you are taxed at source in one, they'll likely get in first, as with . Doesn't necessarily have to full rate in either.But if you do as you suggest and only file gains in France after deducing the Irish tax, I doubt French tax authorities will agree to coming second and thus not getting their full 30% of the actual gains (especially if you are a tax resident in France - it is not their problem that another country you are not living in still wants to tax you, why would they accept to come after that country?).
And if you do it the other way around Revenue might not like not getting their full 33% either.
Income tax is similar. If you are taxed at source in one location, it's offset in the other. First in best dressed I guess.
As much as they will both want to be in first.
France have to recognise that the assets were likely bought before the person became a resident. And the majority of the appreciation of the asset may have occurred by the time you became a tax resident.
Similarly, Ireland have to recognise that you are no longer a resident of Ireland.
In practical terms, you'd really want to be stuck to subject yourself to a double taxation where it occurs.0 -
As pointed out, the Irish legislation allows for the tax levied by the other country to be taken as a deduction in the computation of the chargeable gain. So I think that's a concession that the foreign tax might be the first levied.
I think it's generally accepted, as between revenue authorities in different countries, that levying tax on residents is standard, and is reasonable, and therefore the country that is seeking to tax someone who is non-resident will accept the fact of the tax being imposed by the country of residence. That's why the Irish legislation is drafted the way it is. I would expect, though I don't know for sure, that if the boot were on the other foot — i.e. if France were seeking to levy CGT on a sale of shares or securities by someone resident in Ireland but with a connection to France — France would grant a deduction for the Irish CGT paid.
A similar approach is taken to taxes on assets located in another country. If an Irish resident derives income or gains from, say, letting or selling land in Umbrellastan, it's standard and reasonable for Umbrellastan to tax income/gains derived from that asset, and so any Umbrellastani tax paid by the Irish resident will be deductible in calculating his liability to Irish tax.0 -
I don't think it does require testing in court. It's cover under general tax laws.
Whether the 33% or the 30% is applied first, the outcome the the same c.53%.
Looking at the thread, yourself and Peregrinus disagree on the order in which the taxes should be applied … so there isn’t consensus here (although it seems like Irish legislation points towards Peregrinus’ view).
The order might not matter to you as a taxpayer but it does matter to tax authorities as it impacts the amount they will be receiving. So I don’t believe this is something they would take lightly.
But anyway those are technicalities and I think we agree that at the end of the day this is double taxation no matter how you slice it. And there would be nothing preventing Ireland from amanding the 3 years years rule if CGT is due in the new country of tax residence, International tax treaties are one way, but quite simply it could also be in the legislation - I have came across tax legislation before which specify different tax treatments depending on whether funds are received in a tax heaven (for exemple some countries have legislation to apply higher withholding tax on capital income from some of their domestic assets, if the recipient of that income is resident in a tax heaven).In practical terms, you'd really want to be stuck to subject yourself to a double taxation where it occurs.
3 years is a very long time to wait if you have assets/investments which you don’t think are good ones anymore and should be liquidated. In practise I think most people with a diversified stocks (or even crypto) portfolio will find themselves in that position during any 3 years period.0 -
I think you need to re-read what I said. As I gave no indication on which order it should be applied. I said it depends on whether its taxed the source or not. And point out that the order doesn't matter to the total*.Looking at the thread, yourself and Peregrinus disagree on the order in which the taxes should be applied
Eg I'm taxed on global income. If If I get taxed on foreign income, It's offset domestically, if I'm not taxed on it, I pay tax domestically. The trigger is whether I'm taxed is withheld or not.
Same would apply in this situation, with the additional layer of looping back in a ordinarily resident tax.
*Assuming that the French law is similarly structured. If not, the order may make a difference.
That's really their issue to manage, it's not up to the individual. The Irish law allows for he offsetting of the foreign tax when it's paid. If an equivalent French law exists, then either law gives no indication on the order.The order might not matter to you as a taxpayer but it does matter to tax authorities as it impacts the amount they will be receiving. So I don’t believe this is something they would take lightly.
Ultimately it likely makes little difference to them either. If they instance on being paid first in one instance, it possibly creates a situation where they are paid second under their logic.3 years is a very long time to wait if you have assets/investments which you don’t think are good ones anymore and should be liquidated. In practise I think most people with a diversified stocks (or even crypto) portfolio will find themselves in that position during any 3 years period.
It is a long time. If somebody was putting themselves in that situation. They would either need to ensure there is no double taxation. Or they can realise their gains prior to the second residency taking effect.
Well there is a third option that I won't encourage ormention.0 -
It is double taxation, and Ireland could unilaterally change its laws so as to allow a full credit for the foreign tax paid. That would avoid the double taxation problem. And there would be no need to make any distinction between tax havens and non-tax havens; under that rule, if you have become resident in a country which charges little or no tax, you would get little or no credit against your Irish tax.But anyway those are technicalities and I think we agree that at the end of the day this is double taxation no matter how you slice it. And there would be nothing preventing Ireland from amanding the 3 years years rule if CGT is due in the new country of tax residence, International tax treaties are one way, but quite simply it could also be in the legislation - I have came across tax legislation before which specify different tax treatments depending on whether funds are received in a tax heaven (for exemple some countries have legislation to apply higher withholding tax on capital income from some of their domestic assets, if the recipient of that income is resident in a tax heaven).
The thing is, France could also unilaterally change its laws so as to allow a full credit for foreign tax, and that would be just as effective to avoid double taxation. Why would we expect Ireland, rather than France, to take this step?
The truth is that neither country will move unilaterally on this. Once they do, they (a) lose tax revenue, and (b) remove any incentive for the other country to make any changes. They give away a bargaining chip which could otherwise be used to negotiate reciprocal changes (in a double taxation agreement that would cover CGT, for example).
Ireland is in a sensitive position here, since there is less and less goodwill abroad for our our, um, somewhat aggressive policies on corporate taxation. Any proposal to renegotiate existing double taxation agreements risks being treated by the other party as an invitation to seek changes in relation to acceptance/recognition of Irish corporate tax measures. This is an issue that Ireland would strongly prefer to see addressed multilaterally and, while that is happening, the review and renewal of Ireland's network of DTAs is not likely to be strongly pressed by Ireland.
So I wouldn't expect any early changes on this particular point. Maybe consider retiring to a country other than France? Portugal for a year or so might be nice until you have disposed of your squillions of crypto, and then relocate to France!0 -
I think you need to re-read what I said. As I gave no indication on which order it should be applied. I said it depends on whether its taxed the source or not. And point out that the order doesn't matter to the total*.
As I said, the order is just a detail anyway and the real matter is double taxation, but here is where you suggested that order:As you lose a 1/3 to Ireland, the 30% in France only applies to the 2/3. This makes it an effective 20% (2/3 of 30%). 53% is still horrendous, bit not a bad as 63%.0 -
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Peregrinus wrote: »The thing is, France could also unilaterally change its laws so as to allow a full credit for foreign tax, and that would be just as effective to avoid double taxation. Why would we expect Ireland, rather than France, to take this step?
It is Ireland which is taking the unconventional step of taxing someone who is legally a tax resident elsewhere and not applying any tax credit to avoid double taxation (if I am not mistaken, even if you take the controversial US policy of charging a global income tax to its citizens regardless of country of residence, there is credit given for tax already paid in the country of residence).
There is absolutely no reason for any country to forfeit tax owed by its own residents to facilitate a foreign government taxing those people. Ireland wouldn't entertain it if the situation was reversed, and rightly so.0 -
Does Koinly give a good enough output
to enable all Revenue forms to be filled easily at the end of the year ? I obviously cannot determine that without paying the fee.
Yes. There is a summary sheet with the amount of CGT and income tax to declare.
And then a long report with the detail of the transactions and calculations to come to that figure.
If you have a DEGIRO account, it is somewhat similar to the tax reports provided by DEGIRO.0 -
No, Ireland is not unusual. Most countries base liability to tax on (among other things) some concept of residence, but different countries employ different concepts of "residence" and have different definitions for them, and it's not at all unusual for internationally mobile people to find that they have some form of tax residence, and therefore some tax liability, in two (or more) countries at the same time. And as already stated one country is unlikely to defer unilaterally to the other in that situation. If country A thinks you have a sufficient connection with them for them to tax you, they are not going to defer to country B just because country B also thinks that you have a sufficient connection with them to tax you. They will seek a reciprocal arrangement to cover these matters. This is a large part of the reason why double taxation agreement exist.It is Ireland which is taking the unconventional step of taxing someone who is legally a tax resident elsewhere and not applying a tax credit for to avoid double taxation (if I am not mistaken, even the infamous US policy of charging a global income tax to its citizens includes a credit for tax already paid in the country of residence).
There is absolutely no reason for any country to forfeit tax owed by its own residents to facilitate a foreign government taxing those people. Ireland wouldn't do it either if the situation was reversed, and rightly so.
You are right to point out that the US gives a full credit to its non-resident citizens who are taxed in their country of residence, but this just underlines the point. Under US law, to get the credit, you have to not have tax residence in the US. If you're a tax resident of the US and of another country (which is not uncommon) then you don't get the full credit unless there is a DTA providing it.0 -
Peregrinus wrote: »No, Ireland is not unusual. Most countries base liability to tax on (among other things) some concept of residence, but different countries employ different concepts of "residence" and have different definitions for them, and it's not at all unusual for internationally mobile people to find that they have some form of tax residence, and therefore some tax liability, in two (or more) countries at the same time. And as already stated one country is unlikely to defer unilaterally to the other in that situation. If country A thinks you have a sufficient connection with them for them to tax you, they are not going to defer to country B just because country B also thinks that you have a sufficient connection with them to tax you. They will seek a reciprocal arrangement to cover these matters. This is a large part of the reason why double taxation agreement exist.
You are right to point out that the US gives a full credit to its non-resident citizens who are taxed in their country of residence, but this just underlines the point. Under US law, to get the credit, you have to not have tax residence in the US. If you're a tax resident of the US and of another country (which is not uncommon) then you don't get the full credit unless there is a DTA providing it.
It is usually done when the taxable events relate to assets or income located in the country which is taxing it. For example you own property in country A and sell it while being a resident of country B; sure country A might apply some tax on the transaction. Same if you have income originating in country A (for example dividends).
But for country A to tax you and not offer any credit while you are a legally resident and tax resident in country B, related to assets and income which have nothing to do with country A? No I wouldn't call it usual.0 -
Nothing about that suggests that it only applies in that order. I was point out that 33% and 30% compound to 53% not 63% like you said.As I said, the order is just a detail anyway and the real matter is double taxation, but here is where you suggested that order:
I also said that it’s 53 no matter which comes first, implying either order.
I don’t think there’s anything contentious that needs to be tested in court. It’s pretty clear that the reduction applies. The DTA applying is different. I guess don’t move to France to reduce your tax bill just yet.0 -
For income/gains from assets that have a definite location like land, yes, the country where the asset is located will tax you and the country where you are resident (if different) will usually allow that as a deduction but, in the absence of a tax treaty, not necessarily as a full credit.It is usually done when the taxable events relate to assets or income located in the country which is taxing it. For example you own property in country A and sell it while being a resident of country B; sure country A might apply some tax on the transaction. Same if you have income originating in country A (for example dividends).
Different story for income/gains from assets which have no particular location (like shares). In general, in the absence of a tax treat Country A doesn't care at all whether you are legally resident/resident for tax purposes in Country B, doesn't want to form a view about that and doesn't want to make your liablity to tax in country A dependent at all on your tax residence in country B, a matter which is entirely within the control of country B. You'll notice that the Irish legislation, already quoted, giving you a deduction for foreign tax paid doesn't depend at all on whether you are tax-resident in the foreign country concerned, and that's typical. All that matters is that you had to pay tax there. Why you had to pay tax there is irrelevant.But for country A to tax you and not offer any credit while you are a legally resident and tax resident in country B, related to assets and income which have nothing to do with country A? No I wouldn't call it usual.
So, no, unless there's a tax treaty providing for this, most countries don't give their residents a full tax credit for tax paid in a different country, if they are also resident there. Whatever treatment they offer in this situation will not depend at all on tax residence in the other country. Countries are not inclined to "subordinate" their own tax residence rules to another countries rules, except under an agreed reciprocal arrangement.0 -
Peregrinus wrote: »Different story for income/gains from assets which have no particular location (like shares). In general, in the absence of a tax treat Country A doesn't care at all whether you are legally resident/resident for tax purposes in Country B, doesn't want to form a view about that and doesn't want to make your liablity to tax in country A dependent at all on your tax residence in country B, a matter which is entirely within the control of country B. You'll notice that the Irish legislation, already quoted, giving you a deduction for foreign tax paid doesn't depend at all on whether you are tax-resident in the foreign country concerned, and that's typical. All that matters is that you had to pay tax there. Why you had to pay tax there is irrelevant.
So, no, unless there's a tax treaty providing for this, most countries don't give their residents a full tax credit for tax paid in a different country, if they are also resident there. Whatever treatment they offer in this situation will not depend at all on tax residence in the other country. Countries are not inclined to "subordinate" their own tax residence rules to another countries rules, except under an agreed reciprocal arrangement.
A deduction isn't a tax credit though. All they are doing is allowing foreign tax a an expense which reduces the disposal value to some extend - but clearly it isn’t a tax credit. A proper tax credit would be to credit the tax amount paid abroad against Irish tax liabilities (I.e. if you have a 33% liability in Ireland and have already paid 30% abroad, you are only paying 3% to Ireland).
Also, the basis for this discussion is whether the 3 years rule is genuinely a way to punish tax tourism (a goal I would agree with). Here clearly it isn’t because it is actually punishing people who are moving to a place which isn’t a tax heaven by double taxing them (I.e. if someone is to move abroad, the rule is actually giving an incentive to move to a tax heaven so that at least they are only taxed once). While of course it is legal and the government can do it, it is something I find morally quite reprehensible (and why I don’t find it quite honest for anyone to claim the goal of this rule is to punish tax tourism).
Would you have a couple of examples of other Western countries which are similarly taxing non-residents of the taxing country for gains made on assets not located in the taxing country, and without giving a tax credit for for tax already paid in the person's country of residence? (which is what Ireland is doing here)
You are saying it is not unusual, there must be a few obvious ones you have in mind? (I have an open mind on this and will change my mind if proven wrong, but this would require some specifics of what we are talking about)0 -
Yes. That's the point. Tax deduction is the standard treatment where there's no tax treaty, and it's much less beneficial than tax credit.A deduction isn't a tax credit though. All they are doing is allowing foreign tax a an expense which reduces your liability a bit - but clearly it isn’t a tax credit.
It's not, and so far as I know never has been, an attempt to punish tax tourism. It's simply based on the view that where a gain has accrued over time during a period of residence in Ireland, Ireland shouldn't lose the associated revenue simply because someone leaves the country shortly before realising the gain. It doesn't matter whether they have left the country to go to a tax haven, or to avoid Irish tax, or for any other reason. What matters is that they were resident here while the gain accrued.Also, the basis of this discussion is whether the 3 years rule is genuinely a way to punish tax tourism (a goal I would agree with). Here clearly it isn’t because it is actually punishing people who are moving to a place which isn’t a tax heaven by double taxing them (I.e. if someone is to move, the rule is actually giving an incentive to move to a tax even so that at least you are only taxed once).
They pretty much all do this, to some extent. The concept of "residence" for tax purposes tends to include some people who have already ceased to reside in the country concerned. All countries have their own definitions of tax residence, and these often overlap, so it's easy to be tax resident in two countries at once, at least for a transitional period.Do you have a couple of examples of other Western countries which are similarly taxing non-residents for gains made on assets not located in the taxing country, and without giving a full tax credit for for tax already paid in the person's country of residence rated to those gains? (which is what Ireland is doing here)
You are saying it is not unusual, there must be a few obvious ones you have in mind to make that statement?
That's why the standard OECD tax treaty contains a provision providing relief for this very situation - people within the charge to tax in two countries, primarily because the satisfy the residence tests applied by both. If the problem wasn't a common one, the OECD model DTA wouldn't address it.
And I don't know of any country whose law says, in effect, "You are tax resident here if you satisfy X condition, unless you are also tax resident in some other country [which we don't regard as a tax haven], in which event you are not tax resident here" ( or " . . . you are taxed as if you aren't tax-resident here"). Which is effectively the solution you are suggesting for Ireland. That would be unusual.
Ireland is perhaps out of line in having a particularly "clingy" concept of "ordinary residence", which is the basis of the charge to CGT. You can be ordinarily resident in Ireland for several years after you have, in reality, left. The result is that the period of overlap with tax-residence in another country can be quite long. As between most other countries, it rarely lasts more than a year, and often less. But the problems that result from this are partly alleviated by the fact that Ireland has quite a wide network of DTAs, most of which provide a full credit for foreign CGT. You're unfortunate in that your particular interest is in France, with whom we have a very old DTA that doesn't cover CGT.0 -
A deduction isn't a tax credit though. All they are doing is allowing foreign tax a an expense which reduces the disposal value to some extend - but clearly it isn’t a tax credit. A proper tax credit would be to credit the tax amount paid abroad against Irish tax liabilities
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And that is what happens in countries where the DTA includes CGT. Which is most countries.
Not really. As there are no laws that actively try to double tax people.Here clearly it isn’t because it is actually punishing people who are moving to a place which isn’t a tax heaven by double taxing them
The situation where it happens, such as France, exist because there is not law preventing it - by reason of it predating existence of CGT.0 -
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https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-03-01.pdfSection 29(4) provides in general that an individual who is resident or
ordinarily resident but not domiciled in the State is also chargeable to CGT on
gains from disposals of assets situated outside the State, but only to the
extent that those gains are received in the State. This treatment is known as
the remittance basis of assessment.
Section 29(5) provides rules as to what amounts are to be regarded as
received in the State for the purposes of Section 29(4) – essentially all
amounts paid, used or enjoyed in any manner or form transmitted or brought
into the State are treated as received in the State0
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