Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

Fakent.ie · 16-01-2018 5:25am

Peregrinus wrote: »

It doesn't have to be immediately tradeable for euros in order to have a value capable of being expressed in euros. After all, you generally can't buy land in Japan with euros - they kind of expect Japanese yen, for some reason - but if an Irish resident makes a gain sellling land in Japan, they have to express that gain in euros for CGT purposes. They manage, somehow.

You wouldn't be trading in these things if you couldn't, ultimately, directly or indirectly, convert your gains into fiat currency (because what would be the point?). If your gains can be converted, directly or indirectly, into fiat currency, or into any tradeable items which can be sold for fiat currency, then they have a value which can be expressed in euros. And if your gain really can't be converted, directly or indirectly, into money or money's worth, why in God's name are you "trading" in these things? You could have saved yourself an awful lot of time and trouble just by taking the euros you originally invested and burning them instead.

After all, you told us that you started out by putting euros into an exchange and, somehow, you managed to convert those euros into a cryptocurrency which "doesn't have the euro value". Just reverse the process by which you assigned a euro value to the currency when you bought it to assign a euro value to it as at the date you sold it.

Am i disposing of the coins if I Buy euro/btc - btc/eth - eth/xrp - xrp/eth and then never going back to Euro

its not simple to work out out these transactions when you dont know the price of each coin in euro at the time.

if they just wanted to know how much i invested and how much i ended with it'd be so much easier whats wrong with doing that?

Peregrinus · 16-01-2018 6:41am

Fakent.ie wrote: »

Am i disposing of the coins if I Buy euro/btc - btc/eth - eth/xrp - xrp/eth and then never going back to Euro

Yes.

Fakent.ie wrote: »

its not simple to work out out these transactions when you dont know the price of each coin in euro at the time.

Maybe I'm unfamiliar with the product, and so I'm not seeing the problem here. But don't all these cryptos have a generally-accepted, and widely-quoted, value in USD at any time? If so, then assigning a value in EUR to them is not exactly rocket science.

Fakent.ie wrote: »

if they just wanted to know how much i invested and how much i ended with it'd be so much easier whats wrong with doing that?

Because what you have here is a series of investments. Crypto A is a different asset from Crypto B - if they were the same asset, with the same investment characteristics, there would be no point in switching from Crypto A to Crypto B. Thus your acquisition and subsequent disposal of a holding of Crypto A is a separate investment transaction from your purchase and subsequent disposal of a holding in Crypto B, and the fact that you used the proceeds of the first investment to finance the second doesn't change this.

Yes, it would be much simpler if they simply looked at how many euros you originally put in, and how many you took out when you finally liquidated all your positions and cashed out, effectively deferring the taxation of your gain on each investment in crypto until you wind up all your investments in crypto. But the question is not "what's simpler?" but "what does the CGT legislation require?". And, generally, the CGT legislation does not allow you to defer paying tax on the gains of a particular investment on the basis that you are using the investment proceeds to make a new investment. And there are obvious public policy reasons why the legislation doesn't do this; you could defer paying any CGT at all for years or even decades. Why would that be a good idea?

GreeBo · 16-01-2018 12:08pm

lifeandtimes wrote: »

No because the first €1200 or so of profit is not subject to CGT.

Wrong.
Did you even read revenue.ie?

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-do-you-pay-and-file-cgt.aspx wrote:

How do you file your CGT return?
You should file by 31 October in the year after the date of disposal. You must do this even if no tax is due because of reliefs or losses.

jobless · 16-01-2018 12:38pm

GreeBo wrote: »

Wrong.
Did you even read revenue.ie?

so any coin to coin trade that made profits need to be declared even if its below the threshold..... i wonder how strick they are on this.... Id say 0% of people have done this

asteroids over berlin · 16-01-2018 12:47pm

Interesting from about 6:30 mins in, obviously it's the UK taxation system but something to be aware of

lifeandtimes · 16-01-2018 12:47pm

jobless wrote: »

so any coin to coin trade that made profits need to be declared even if its below the threshold..... i wonder how strick they are on this.... Id say 0% of people have done this

I know, seems very intrusive "hey mr. Revenue, I made no profits this year" how would they even.

I don't doubt people have too just doesn't make sense

lifeandtimes · 16-01-2018 1:38pm

I just had a thought

If someone opened up a crypto store like a bookies for people to go in and lodge/trade fiat for crypto and withdraw fiat from their crypto?

How would that stand regarding tax?

Blacktie. · 16-01-2018 2:31pm

lifeandtimes wrote: »

I just had a thought

If someone opened up a crypto store like a bookies for people to go in and lodge/trade fiat for crypto and withdraw fiat from their crypto?

How would that stand regarding tax?

You'd still have to pay taxes. Walking into a shop to do it doesn't remove your tax obligation.

GreeBo · 16-01-2018 2:37pm

lifeandtimes wrote: »

I just had a thought

If someone opened up a crypto store like a bookies for people to go in and lodge/trade fiat for crypto and withdraw fiat from their crypto?

How would that stand regarding tax?

You are still wrongly equating CGT with cashing out into EUR.
CGT is due on disposal, and the word disposal has been explained multiple times already on this thread.

lifeandtimes · 16-01-2018 4:22pm

lifeandtimes wrote: »

I just had a thought

If someone opened up a crypto store like a bookies for people to go in and lodge/trade fiat for crypto and withdraw fiat from their crypto?

How would that stand regarding tax?

Sorry I should have clarified I'm not referring to an individual, I mean with the shop itself. What tax does the shop have to pay.

My apologies for any confusion

GreeBo · 16-01-2018 4:48pm

lifeandtimes wrote: »

Sorry I should have clarified I'm not referring to an individual, I mean with the shop itself. What tax does the shop have to pay.

My apologies for any confusion

I'm not sure of the relevance of the question tbh?

ZeroThreat · 16-01-2018 4:48pm

lifeandtimes wrote: »

Sorry I should have clarified I'm not referring to an individual, I mean with the shop itself. What tax does the shop have to pay.

My apologies for any confusion

They're operating as a day to day business, so I reckon it would be either C.T. (12.5 %) assuming it was a limited company, or income tax if a sole trader.

lifeandtimes · 16-01-2018 4:50pm

GreeBo wrote: »

I'm not sure of the relevance of the question tbh?

What way would tax work for a store taking cash in exchange for crypto and vice versa. Are there any corporate rules they need to follow?

Would regulators even allow it? Obviously they would need records to ensure no money was being laundered.

lifeandtimes · 16-01-2018 4:51pm

ZeroThreat wrote: »

They're operating as a day to day business, so I reckon it would be either C.T. (12.5 %) assuming it was a limited company, or income tax if a sole trader.

Thanks that make a it bit more clearer for me

GreeBo · 16-01-2018 5:07pm

From https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-02-01.pdf

revenue wrote:

Companies capital gains (other than gains from disposals of development
land) are computed in accordance with capital gains tax principles.
Companies’ net chargeable gains are included in companies’ profits for
Corporation Tax purposes and are recalculated to give an amount which, when
charged at the corporation tax rate, produces the same tax result as if the net
gains were charged at the appropriate CGT rate (section 78 TCA).

ZeroThreat · 16-01-2018 5:39pm

GreeBo wrote: »

From https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-02-01.pdf

ah yes, forgot about that. Essentially they need to multiply by 33/12.5 to adjust figure before calculating CT so it works out the same.

You seem to be well up on all this stuff, part of your job I take it?

GreeBo · 16-01-2018 5:57pm

ZeroThreat wrote: »

ah yes, forgot about that. Essentially they need to multiply by 33/12.5 to adjust figure before calculating CT so it works out the same.

You seem to be well up on all this stuff, part of your job I take it?

TBH its all on revenue.ie, there seems to be something on this crypto forum against just reading the documentation provided.
I suspect it stems from people simply not wanting to pay CGT ( which I can understand)

At least with the current bloodshed any potential tax liability is much lower

:(

lostboy75 · 16-01-2018 6:10pm

GreeBo wrote: »

I suspect it stems from people simply not wanting to pay CGT ( which I can understand)

You have repeatedly said that people don't want to pay tax (who does!) Yet this thread was started to try and figure out how to pay it, and how to calculate it. Most people posting are asking questions about that. There is little evidence that people in this thread are only looking for ways to avoid it.

What we know:
Tax will have to be paid, but yet I still don't know how to calculate it, and neither do you. It's a calculated guess on everyone's behalf until revenue clarifies. Saying treat it as currency trading does make sense though for now.
I think everyone needs to carefully record every transaction. I wish I had thought to record the value of both traded currencies at the time of the trade to their dollar price. But I can go back and attempt that, and will record it going forward.

GreeBo · 16-01-2018 6:14pm

lostboy75 wrote: »

You have repeatedly said that people don't want to pay tax (who does!) Yet this thread was started to try and figure out how to pay it, and how to calculate it. Most people posting are asking questions about that. There is little evidence that people in this thread are only looking for ways to avoid it.

What we know:
Tax will have to be paid, but yet I still don't know how to calculate it, and neither do you. It's a calculated guess on everyone's behalf until revenue clarifies. Saying treat it as currency trading does make sense though for now.
I think everyone needs to carefully record every transaction. I wish I had thought to record the value of both traded currencies at the time of the trade to their dollar price. But I can go back and attempt that, and will record it going forward.

Why do you think it will *ever* be treated any differently than as currently laid out on revenue.ie?

Its not a guess at all (for the vast, vast majority of users and cases)
Continuing with this style of posting is just encouraging posters to not pay tax which could *severely* come back to haunt them with penalties.

What do you not know how to calculate exactly?

I cant suddenly stop paying tax on buying and selling houses because I think revenue should clarify some specific regulations regarding 4 storey, red brick houses in Ballsbridge.

lostboy75 · 16-01-2018 6:23pm

How do you take that from what I posted! I said tax had to be paid, but I'm uncertain on how to correctly do that.
And now your taking that to be another person who doesn't want to pay tax...

One poster even said his accountant wasn't sure on how to deal with it. If that doesn't mean there is confusion well what does?
I agreed with you that for now, treat it as currency trading.
But clarification from revenue would be helpful.

lifeandtimes · 16-01-2018 6:28pm

GreeBo wrote: »

Why do you think it will *ever* be treated any differently than as currently laid out on revenue.ie?

Its not a guess at all (for the vast, vast majority of users and cases

But you can't for 100% say that's the way it needs to be paid let's be honest here unless you actually workfor revenue and have specifically dealt with cryptocurrency. If not then Revenue have not specifically said this is the way to go about it.

Cryptocutrency is new territory and nobody here has come to explain a scenario where they made a lot of money and contacted revenue to pay tax and was then audited im detail.

Going by your model is fair enough at this point in time but you cant confirm this is the way it goes or will be for the future.

The only solid advice we can give is record every transaction, probably pay 33% over the threshold and ask revenue to 100% clarify where we go with this and release certified documentation about it, if you pay over your taxs in a year they give the surplus back to you, can't see why they wouldn't do the same here *IF* the 33% doesnt apply

Fakent.ie · 16-01-2018 7:39pm

So I'm not sure if people are familar with Binance one of the crypto exchanges but here is a picture I seen online showing 84 pages of ONLY trx(tron)transactions how is this person going to work out what he has to pay? https://gyazo.com/096490c8fea99327636faa02299c7aa5

not sure how to upload photos so i gyazod

sunrainmooncl · 16-01-2018 11:11pm

GreeBo wrote: »

Wrong.
Did you even read revenue.ie?

Jaysus got told two different things again.

"You must do this even if no tax is due because of reliefs or losses."

What does this mean?

The same page says

"Form CG1 - if you do not usually submit annual tax returns" (this is me)
"Form 12 - if you are a PAYE worker" (this is also me)

Downloading the Form CG1, it's a form for "Capital Gains Tax Return and Self-Assessment 2016". I guess this isn't what I need.

Downloading the Form 12, it's a form for "Tax Return for the year 2016"

I'm trying to give notice that I made about 60e profit in Dec 2017

(although now I haven't made any profit since the market has gone wallop)

Fakent.ie · 16-01-2018 11:21pm

sunrainmooncl wrote: »

Jaysus got told two different things again.

"You must do this even if no tax is due because of reliefs or losses."

What does this mean?

The same page says

"Form CG1 - if you do not usually submit annual tax returns" (this is me)
"Form 12 - if you are a PAYE worker" (this is also me)

Downloading the Form CG1, it's a form for "Capital Gains Tax Return and Self-Assessment 2016". I guess this isn't what I need.

Downloading the Form 12, it's a form for "Tax Return for the year 2016"

I'm trying to give notice that I made about 60e profit in Dec 2017 (although now I haven't made any profit since the market has gone wallop)

bubble popped panic sell everything you have report all losses to revenue....

GreeBo · 16-01-2018 11:25pm

lifeandtimes wrote: »

But you can't for 100% say that's the way it needs to be paid let's be honest here unless you actually workfor revenue and have specifically dealt with cryptocurrency. If not then Revenue have not specifically said this is the way to go about it.

I can actually. Unless & until the law changes or revenue provide a different guide, the current guide is whats used. Any changes are not retrospective, so your tax liabilities from crypto up to and including 2017 are defined.

lifeandtimes wrote: »

Cryptocutrency is new territory and nobody here has come to explain a scenario where they made a lot of money and contacted revenue to pay tax and was then audited im detail.

Whats that got to do with anything though?
Revenue have published CGT guidelines. You have decided that you think Crypto is somehow different. Revenue & legislation hasnt, so its not different.

lifeandtimes wrote: »

Going by your model is fair enough at this point in time but you cant confirm this is the way it goes or will be for the future.

No one can confirm that for any type of taxes, sure tax rates change all the time. But what we do know, as above, is what the CGT situation was upto and including 2017/

lifeandtimes wrote: »

The only solid advice we can give is record every transaction, probably pay 33% over the threshold and ask revenue to 100% clarify where we go with this and release certified documentation about it, if you pay over your taxs in a year they give the surplus back to you, can't see why they wouldn't do the same here *IF* the 33% doesnt apply

If you pay 33% on profits and they later decide that this was in incorrect filing then of course you can claim back any difference owed to you.

GreeBo · 16-01-2018 11:26pm

sunrainmooncl wrote: »

I'm trying to give notice that I made about 60e profit in Dec 2017 (although now I haven't made any profit since the market has gone wallop)

FYI your 2017 gains are unchanged.
Since the crash perhaps you will have a loss to offset something against next year, but (unfortunately) even though it all may be worthless now, you owe CGT based on how you were on 31st Dec 2017.

Fakent.ie · 16-01-2018 11:53pm

GreeBo wrote: »

FYI your 2017 gains are unchanged.
Since the crash perhaps you will have a loss to offset something against next year, but (unfortunately) even though it all may be worthless now, you owe CGT based on how you were on 31st Dec 2017.

how is this person going to work out what he has to pay? https://gyazo.com/096490c8fea99327636faa02299c7aa5
84 pages of TRX transactions?

GreeBo · 17-01-2018 12:14am

Fakent.ie wrote: »

how is this person going to work out what he has to pay? https://gyazo.com/096490c8fea99327636faa02299c7aa5
84 pages of TRX transactions?

Hows is this a problem for anyone other than this person?

"I didnt keep proper records and now its too much effort for me" isnt really a valid reason to not pay taxes.

I'm not sure what answer you are looking for tbh?
"ok thats fine, you owe nothing"?

barneystinson · 17-01-2018 12:19am

Fakent.ie wrote: »

how is this person going to work out what he has to pay? https://gyazo.com/096490c8fea99327636faa02299c7aa5
84 pages of TRX transactions?

I'd say he'll have some work to do on that spreadsheet. How does anyone work out what tax they have to pay? By working it out.

sunrainmooncl · 17-01-2018 12:26am

GreeBo wrote: »

FYI your 2017 gains are unchanged.
Since the crash perhaps you will have a loss to offset something against next year, but (unfortunately) even though it all may be worthless now, you owe CGT based on how you were on 31st Dec 2017.

I understand that.

From revenue.ie:

Personal Exemption
The first €1,270 of your gain is exempt from CGT.

Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

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