Tax issues - how will Revenue know?

Anthracite · 09-01-2018 8:40pm #1

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.

Anthracite · 09-01-2018 9:27pm

Mr.S wrote: »

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

...what happens? That's what I'm wondering.

Blacktie. · 09-01-2018 9:32pm

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.

Bandara · 09-01-2018 9:44pm

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.

Tinder Surprise · 09-01-2018 9:52pm

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?

Bandara · 09-01-2018 9:58pm

Tinder Surprise wrote: »

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 %

Bandara · 09-01-2018 10:00pm

Mr.S wrote: »

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

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

:P

Soulsun · 09-01-2018 10:01pm

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.

Damiencm · 09-01-2018 10:08pm

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 â‚¬5k or more. Both personal and business

Tinder Surprise · 09-01-2018 10:21pm

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'

lifeandtimes · 09-01-2018 10:30pm

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 â‚¬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

Robert McGrath · 09-01-2018 10:32pm

Soulsun wrote: »

So tax avoidance in Poland.

“Avoidance” sounds like something of a euphemism

Dades · 09-01-2018 10:33pm

That would be evasion, surely.

Damiencm · 09-01-2018 10:51pm

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

Autochange · 09-01-2018 10:53pm

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.

ZeroThreat · 10-01-2018 1:06am

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.

Whelo79 · 10-01-2018 1:10am

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.

ZeroThreat · 10-01-2018 1:17am

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.

EagererBeaver · 10-01-2018 1:36am

Not without market ready replacements it's not.

Whelo79 · 10-01-2018 2:06am

EagererBeaver wrote: »

Not without market ready replacements it's not.

FairX beta testing starts early February.

relax carry on · 10-01-2018 10:24am

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.

relax carry on · 10-01-2018 10:27am

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

relax carry on · 10-01-2018 10:35am

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 â‚¬5k or more. Both personal and business

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

ZeroThreat · 10-01-2018 11:03am

relax carry on wrote: »

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.

relax carry on · 10-01-2018 11:28am

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.

GreeBo · 10-01-2018 11:33am

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!

joeguevara · 10-01-2018 11:38am

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.

This is not true. There is no fixed amount that is reportable. Suspicious activity or transactions are required to be reported. Not an amount.

Sponsorgate · 10-01-2018 5:34pm

Deposit to a revolut account?

AlmightyCushion · 10-01-2018 5:37pm

Sponsorgate wrote: »

Deposit to a revolut account?

Seeing as they already charge Irish stamp duty, it's likely they already comply with revenue on other tax issues and will report large or suspicious transactions to revenue.

Bandara · 10-01-2018 6:07pm

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.

You could of course, if you were that way inclined, go into a casino in poland put 10k on red, and 10k on black and spin the wheel, all the while praying to the good Lord that it doesn’t land on zero, and tipping the dealer €100 while you place the bet.

And ask the casino for your winnings in a cheque.

If you were a person of devious intentions of course.

BrokenArrows · 10-01-2018 6:07pm

Revenue have agreements with many organizations to get information.
And just because they might not have agreements now it doesnt mean they wont in the future.

In a standard audit they will look back through 7 years but are allowed to look back as far as they want.

If you used some provider to keep your money online to avoid tax today and revenue make an agreement with that company in 7 years they could still catch you.

Tax issues - how will Revenue know?

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