Are we excited yet?

AtticusFinch86

Shedite27 wrote: »

You shouldn’t be paying tax on the earned €10 twice. If you take your pay in €10 coins, you pay income tax on that €10.

If you sell the coin at €10, there’s no GAIN, so no Capital GAINS tax. You’d only
Pay CGT if you sell the coin at €15, in which case you’d pay 33% CGT on the €5.

I do similar at work, can take my pay in shares, which is liable to Income tax, I pay CGT only on the profit I make on the shares

You don't pay tax on the 10e twice.

Donald Trump

Whelo79 wrote: »

Lots of salt and shade from the 'non investors' Meeeooow

Fairly ironic post in fairness :pac:

FFVII

delly wrote: »

You ask and then answer it yourself, nobody can, not the boards experts, nor the YouTube experts with millions of subscribers, nor can financial experts answer it. Even those who say they know are like those who predicted the housing crash in 2007,eventually they will be proved right, but it could be 1 month or 10 years from now.

it will go up at least once more

http://rss.slashdot.org/~r/Slashdot/slashdot/~3/KGTs-RcL1rE/is-bitcoin-more-traceable-than-cash

pioneerpro

Shedite27 wrote: »

You shouldn’t be paying tax on the earned €10 twice. If you take your pay in €10 coins, you pay income tax on that €10.

If you sell the coin at €10, there’s no GAIN, so no Capital GAINS tax. You’d only
Pay CGT if you sell the coin at €15, in which case you’d pay 33% CGT on the €5.

I do similar at work, can take my pay in shares, which is liable to Income tax, I pay CGT only on the profit I make on the shares

Income tax on the market value on the date attained, CGT on any appreciation on the date of disposal.

So, in short if you're staking you're paying

52% of the Coins received (presuming you're already in the top USC bracket)
33% of any increase in value of the coins received.

Which makes it incredibly not worth it in Ireland.

Now wait, it gets worse. The closest asset class I can think of for tax purposes is an accumulating ETF. For American Domiciled ETFs in Ireland, this is how its taxed:

Tax on gains: Income tax + PRSI + USC (52%)
Tax on income: Income tax + PRSI + USC (52%)

So what if Revenue decides that staking is a non-EU domiciled source of financial income? 52% both ends. What about DIRT if they regard staking as interest?

And if you qualify with the 'badge of trader' activity (which is subjective, based on English legal precedent, and entirely at revenue's discretion based on their interpretation of how many trades you've made, with what frequency etc...) you're paying 52% on the lot anyway.

As per Doyle Keaney:

https://doylekeaney.ie/news/crypto-assets-high-level-irish-tax-considerations/

One of the common questions arising is whether the profits or losses arising from crypto-asset transactions are subject to income tax/corporation tax or subject to capital gains tax (“CGT”). If the crypto asset transactions are regarded as being a trading activity the profits would be subject to income tax/corporation tax, CGT would apply to transactions in crypto-assets that are held as investments. This question is determined by reference to what are known as the “Badges of Trade” and also to related case law. Key factors to consider include, the:

• volume and frequency of activity,
• motive,
• level of organisation,
• risk, and
• commerciality.

The question of the taxation of profits or losses from crypto-asset transactions is nuanced. A similar question has been addressed in numerous tax cases in relation to conventional share trading, in short, it has been found that even individuals trading in shares in an organised fashion with a high degree of volume and frequency are making investments rather than trading in shares and it is thought that the same logic would apply to crypto-assets. The outcome of this is that gains or losses for individuals on crypto-asset transactions are likely to be subject to CGT (with some exceptions). The bar for a company to be regarded as trading rather than making investments is lower than that for an individual (the Badges of Trade must still be satisfied), Revenue accept that it is possible in certain cases for a company to be carrying on a trade of dealing in shares and the same analysis should apply to crypto-assets. The upshot of this is that these profits would be subject to tax at 12.5%.

It is likely that profits derived from crypto mining activities, whether carried on by an individual or a company, would be regarded as trading profits subject to income tax/corporation tax rather than CGT. The amount of profit subject to tax would be determined using the financial accounts prepared in respect of the mining business. If the mining activity does not amount to a trade, the value of any crypto-assets or fees received for successful mining, less allowable expenses, may be taxable as miscellaneous income.

Airdrops are also liable under CAT rather than CGT, but also 33% so if you're declaring you're OK.

(To people going 'surely not, provide links' etc... this is not how revenue works. You won't find personal anecdotes online for precedent, nor will you find clear or even consistent published advice from Revenue re: cryptocurrencies. CAB seemingly like the ambiguity regarding the asset class, so its unlikely to change in the future).

HGVRHKYY

pioneerpro wrote: »

Income tax on the market value on the date attained, CGT on any appreciation on the date of disposal.

So, in short if you're staking you're paying

52% of the Coins received (presuming you're already in the top USC bracket)
33% of any increase in value of the coins received.

Thanks for this detailed post. We really are a ****hole country when it comes to individuals actually trying to make a few quid for themselves, if you listen closely you can actually hear "how dare you" uttered any time you make a trade that earns you profit.

If you're staking natively, like in a wallet with ADA for example, how do you get the accurate value of the staking rewards to know how much should be taxed? If staking on an exchange you can just get the value off that exchange I presume, but what about outside things like that

pioneerpro

HGVRHKYY wrote: »

If you're staking natively, like in a wallet with ADA for example, how do you get the accurate value of the staking rewards to know how much should be taxed? If staking on an exchange you can just get the value off that exchange I presume, but what about outside things like that

Onus is on you to prove it, as with all financial transactions and investments pertaining to yourself.

If Revenue come up with a different figure, it's entirely on you to prove otherwise. Not argue otherwise, prove otherwise.

So the simple answer is, most can't or won't be able to derive accurate value for anything of the sort. When push comes to shove Revenue have no problem giving a notional value of what they feel your tax liability is, and allow you the opportunity to (quickly) prove otherwise before they start adding penalties.

HGVRHKYY

pioneerpro wrote: »

Onus is on you to prove it, as with all financial transactions and investments pertaining to yourself.

If Revenue come up with a different figure, it's entirely on you to prove otherwise. Not argue otherwise, prove otherwise.

So the simple answer is, most can't or won't be able to derive accurate value for anything of the sort. When push comes to shove Revenue have no problem giving a notional value of what they feel your tax liability is, and allow you the opportunity to (quickly) prove otherwise before they start adding penalties.

Yes, but my question is how do you actually go about it, is it just a matter of using the likes of Coingecko to check the values on there at the time of distribution?

pioneerpro

HGVRHKYY wrote: »

Yes, but my question is how do you actually go about it, is it just a matter of using the likes of Coingecko to check the values on there at the time of distribution?

In some cases I'm not sure is it even explicitly possible. You're talking about correlations with timestamps and trusted market sources. Hence why I stay away from the whole thing as a rule.

pioneerpro

HGVRHKYY wrote: »

Thanks for this detailed post. We really are a ****hole country when it comes to individuals actually trying to make a few quid for themselves, if you listen closely you can actually hear "how dare you" uttered any time you make a trade that earns you profit.

Actually, just while I think of it, the biggest sham here is USC.

This was a 'temporary' measure brought in at the height of the financial crisis in 2010 to shore up the health and income levies, alongside things like gutting the pension reserve scheme.
https://www.independent.ie/business/budget/news/timeline-irelands-most-hated-tax-here-is-the-history-of-the-universal-social-charge-31605463.html

Eleven years later it is still hanging around like a bad smell and it effectively dumps an extra 8% tax liability on you for anything that is construed as trading or staking. I firmly believe this will go up to 10% to account for PUP and other pandemic related expenditure as its the only flat tax of consequence we actually have.

Donald Trump

HGVRHKYY wrote: »

Yes, but my question is how do you actually go about it, is it just a matter of using the likes of Coingecko to check the values on there at the time of distribution?

pioneerpro wrote: »

In some cases I'm not sure is it even explicitly possible. You're talking about correlations with timestamps and trusted market sources. Hence why I stay away from the whole thing as a rule.

Just pick a methodology and be consistent.



Those markets appear to be liquid with executable quotes readily available. So there shouldn't be any argument over price discovery.



Pick "end of day" closing quotes. (Yes, I know it is a 24 hour market but choose a reliable source that publishes closing quotes and just use that all the time).

cnocbui

pioneerpro wrote: »

Actually, just while I think of it, the biggest sham here is USC.

This was a 'temporary' measure brought in at the height of the financial crisis in 2010 to shore up the health and income levies, alongside things like gutting the pension reserve scheme.
https://www.independent.ie/business/budget/news/timeline-irelands-most-hated-tax-here-is-the-history-of-the-universal-social-charge-31605463.html

Eleven years later it is still hanging around like a bad smell and it effectively dumps an extra 8% tax liability on you for anything that is construed as trading or staking. I firmly believe this will go up to 10% to account for PUP and other pandemic related expenditure as its the only flat tax of consequence we actually have.

I would agree, but DIRT probably takes the cake as the ultimate in begrudgery that the Revenue feckers just can't let go of.

The rule regardeing ETFs is just beyond comprehension. Is there anywhere else in the world that requires you to pretend you sold your ETF and bought it back so Revenue can make you pay CGT on the gain you haven't actually made?

I can't wait to get out of this taxation hell-hole.

The USC is needed to fund the EU's second most highly paid civil service, their pensions, and the utterly uncalled for pay rise they are getting, just because the nurses and doctors put on a good show.

Donald Trump

HGVRHKYY wrote: »

Thanks for this detailed post. We really are a ****hole country when it comes to individuals actually trying to make a few quid for themselves, if you listen closely you can actually hear "how dare you" uttered any time you make a trade that earns you profit.

If you're staking natively, like in a wallet with ADA for example, how do you get the accurate value of the staking rewards to know how much should be taxed? If staking on an exchange you can just get the value off that exchange I presume, but what about outside things like that

Tax is tax for everyone and you are supposed to pay it the same as anyone.


I can buy an industrial unit tomorrow, rent it out for a few years, pay income tax on the net income and then also pay on any capital gains when I dispose of it.


It isn't a special feature of you making a trade

Donald Trump

I had a read of the Basel Committee note on risk weighting for cryptoassets including bitcoin. As I would expect, they are taking a very conservative view on them. Both for capital requirements and for liquidity and funding ratios.

AtticusFinch86

cnocbui wrote: »

I would agree, but DIRT probably takes the cake as the ultimate in begrudgery that the Revenue feckers just can't let go of.

The rule regardeing ETFs is just beyond comprehension. Is there anywhere else in the world that requires you to pretend you sold your ETF and bought it back so Revenue can make you pay CGT on the gain you haven't actually made?

I can't wait to get out of this taxation hell-hole.

The USC is needed to fund the EU's second most highly paid civil service, their pensions, and the utterly uncalled for pay rise they are getting, just because the nurses and doctors put on a good show.

Nothing to do with Revenue. They dont decide the law. They only apply it.

Whelo79

Deleted User wrote: »

What kind of returns are you getting? I've been recently dabbling with sovryn which seems like a similar project

Here's a screenshot of my stakes and the APY I am getting for each of them.

You can see the APY varies, this is due to when the stake was placed and how long the stake is for (longer pays better)

The first stake at 8% will grow over the coming days because it was only placed yesterday. 8% is the guaranteed base APY. This base rate of 8% is based on every single token being staked. If 50% of tokens are staked the base rate is 16%. Further interest comes from the ETH used in the regular auctions being used to buyback AXN from Uniswap and distributed to stakers.

These APY calculations DO NOT count the BTC stakers get from the VCA auctions.

Calculations work out that any max stake (5555 days) receives their initial stake value back within roughly 18 months from the BTC they receive from the VCA auctions.

There are severe penalties for ending stakes early. Technically by staking you are burning your tokens. When you stake expires your tokens and interest are reminted. If you end the stake early a large percentage of your capital and interest are not reminted.

pioneerpro

Donald Trump wrote: »

Tax is tax for everyone and you are supposed to pay it the same as anyone.

I can buy an industrial unit tomorrow, rent it out for a few years, pay income tax on the net income and then also pay on any capital gains when I dispose of it.

It isn't a special feature of you making a trade

I'll agree with you on one point - tax is tax and crypto isn't some special asset class due to ambiguity and lack of detailed formal communications from Revenue. However, all we're doing playing devil's advocate here is normalising the sad reality of Ireland vs most of the developed world who can manage their pension funds and engage in things like FIRE by building wealth through investment.

Most recently the FIRE focus has been on things like staking crypto and investing in S&P 500 and similar indexes - the two safest ways to generate wealth as recognised internationally in 2021 are taxed past the point that they make any sense in the Irish context. And we are *complete* outliers in both the EU and the world for our approaches.

Here we can't even depend on compounding interest from basic financial instruments like ETFs due to deemed disposal rules. Managing wealth and hedging against the future should be a basic part of financial literacy. Here it's subject to utterly draconian barriers to entry that have denoted property as the only acceptable investment and have ended up, in part, contributing to a major housing crisis.

Look at our closest and most comparable neighbour - the UK. If you combine the CGT allowance and their ISA tax-free investment vehicle, you realise that the composite tax free stock speculative gain allowance in the UK is actually higher than the Irish median net income. Any ****eing on about strawmen and industrial units is completely irrelevant - we're bent over backwards on personal wealth generation which is the issue at hand here, not acting as a sole-trader or some other SME/Startup style scenario.

Donald Trump

I don't know why you are going on about something being a strawman. The industrial unit example was merely a simple, and presumably more relatable, analogy to help anyone unclear to understand why income tax would be paid on one form of wealth and capital gains tax on another.

Obviously you know the difference. And so, the post wasn't aimed at you. One or two other posters were asking questions about why income tax for one component and capital gains tax on another for your "investing + staking" scenario.

wotzgoingon

BTC is on a rise.

Thargor

Personally after a few years now of semi-successful messing around with a trading stack of Ethereum separate from my main holding Ive found the best approach to tax is just to ignore it and play dumb in the unlikely event that it turns out the Irish authorities even know what cryptocurrency is.

Donald Trump

Thargor wrote: »

Personally after a few years now of semi-successful messing around with a trading stack of Ethereum separate from my main holding Ive found the best approach to tax is just to ignore it and play dumb in the unlikely event that it turns out the Irish authorities even know what cryptocurrency is.

Playing dumb won't get you anywhere with Revenue. You're just taking a chance. At the end of the day, Revenue (or their equivalent in other jurisdictions) are the government body with real teeth

delly

wotzgoingon wrote: »

BTC is on a rise.

I just came on to say the same and to see if Elon has been tweeting. Unusual to see it on a Sunday, and I say that with all of my 5 weeks experience monitoring it.

delly

Looks like I wasn't disappointed.
https://mobile.twitter.com/elonmusk/status/1404132183254523905

wotzgoingon

delly wrote: »

Looks like I wasn't disappointed.
https://mobile.twitter.com/elonmusk/status/1404132183254523905

What did he say it must have been removed or a bad link as I cannot see the post.

delly

It was a reply to another tweet, I've pasted it below:
'When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions.'

ShaneU

wotzgoingon wrote: »

What did he say it must have been removed or a bad link as I cannot see the post.

https://twitter.com/elonmusk/status/1404132183254523905

fritzelly

wotzgoingon wrote: »

BTC is on a rise.

Not just BTC, everything in an upward swing

fritzelly

fritzelly wrote: »

Not just BTC, everything in an upward swing

I find it really weird how 90% of crypto follows the same movement. How is that even possible

patnor1011

Deleted User wrote: »

I find it really weird how 90% of crypto follows the same movement. How is that even possible

Because very few people can afford to spend 30-40k for just 1btc so they go for other coins hoping to become rich one day soon. It is also that zeroes mentality it is always more enticing to have couple hundreds or thousands of "something" than having 0.000XYZ of btc.
That is why you see people posting that they bought 100k "sats" as it sound bolder than saying they bought 0.001btc.

Whelo79

[Deleted User] wrote: »

I find it really weird how 90% of crypto follows the same movement. How is that even possible

Because everything is strongly linked with BTC and ETH. They are the main trading pairs and when their value rises so too does all the value of the alt coins, just usually not by as much. And when BTC and ETH dump,the alt coins usually dump harder.