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

.G. · 01-02-2018 06:50PM

jobless wrote: »

this kinda goes against the replies others have gotten from the revenue here though?..what do we do?.. im confused

You ask them yourself. Their reply to you will steer you right, not what anyone in here says. Even if their answer to you is wrong they've told you its right so thats how you proceed. I'm eagerly awaiting their response to me so I know for sure how to proceed.

lifeandtimes · 01-02-2018 07:13PM

What if you started buying crypto in January.

Executed maybe 20 transactions while keeping a record of them, increased your portfolio by 20% and now want to leave them as they are for a few years to see if they gain any value.

As you haven't converted it back to fiat, I assume you still fill out a form but don't have to pay CGT yet?

Also what about the next few years, do you still have to fill out form every year even if you haven't made any more transacrions or withdrew your crytpo to fiat?

.G. · 01-02-2018 09:28PM

You can ask as many questions as you like here, you will only get the definitive answer by putting those questions in an email and sending them to revenue themselves. There's many educated lads here and many educated answers and some not so educated but you will only get the definitive answer to your situation by asking them yourself. A few of us have asked now, only one has heard back so far. When more hear back and put the answers here a clearer picture may emerge but again, the answers we get will only apply to us as we've asked for and received an official response that we can refer back to in the future.

nxbyveromdwjpg · 01-02-2018 09:55PM

AlmightyCushion wrote: »

The same way people do it for shares/currency/other assets. Take your scenario above and replace BTC with Dollars and ETH with Yen. This person is in the same situation. How do you propose this person pays the taxman before the deadline?

My balance on an exchange is little more than an IOU though. I don't even own the private keys or have control of the private key.

I haven't realised any gain until I've cashed out, or at minimum withdrawn the second asset from the exchange.

What happens if I trade from BTC to ETH, pay the 33% in euro out of other savings, and then the exchange goes bust/gets hacked/gets shut down ?

I have realised no gain and paid 33% tax of an IOU.

barneystinson · 01-02-2018 10:20PM

Amirah Cold Cafe wrote: »

My balance on an exchange is little more than an IOU though. I don't even own the private keys or have control of the private key.

I haven't realised any gain until I've cashed out, or at minimum withdrawn the second asset from the exchange.

What happens if I trade from BTC to ETH, pay the 33% in euro out of other savings, and then the exchange goes bust/gets hacked/gets shut down ?

I have realised no gain and paid 33% tax of an IOU.

Your money in a bank account or stockbrokers account is little more than an IOU, should you only pay tax on share sales when you have a fat wad of notes in your hand..?

But then again, a €50 note is little more than an IOU... :rolleyes:

AlmightyCushion · 01-02-2018 10:43PM

Amirah Cold Cafe wrote: »

My balance on an exchange is little more than an IOU though. I don't even own the private keys or have control of the private key.

I haven't realised any gain until I've cashed out, or at minimum withdrawn the second asset from the exchange.

What happens if I trade from BTC to ETH, pay the 33% in euro out of other savings, and then the exchange goes bust/gets hacked/gets shut down ?

I have realised no gain and paid 33% tax of an IOU.

That works the same for share/currencies and other assets. As above replace BTC with USD and ETH with Yen. That's how it works for other assets. You can argue it's unfair but that is how the tax is applied to other assets like shares and currencies.

If you think that isn't fair you should see how badly UCITS ETFs (basically a fund made up of other assets like shares) are treated. In your scenario, at least you would be able to carry over he loss you realised and offset it against gains you make in the future. E.g. if you lost €100,000 on ETH but a few years later you make a gain of €150,000. You can offset that €100,000 meaning you would only owe tax on €50,000.

With UCITS ETFs, you can't do this. Also with UCITS ETFs, you have to do a deemed disposal every 8 years. So with UCITS ETFs even if you plan on never selling them, you still pay CGT on them every 8 years. It's pretty shít but thems the rules. Just because you don't like the rules, or think they're unfair, stupid or shít doesn't mean they don't apply. Maybe Revenue will treat crypto currencies differently to other assets and trading one crypto for another won't be considered a disposal but we don't have anything official to suggest they will. You should treat them like other assets (as in, trading one crypto for another is a disposal and liable for CGT) to avoid a potentially large tax bill with interest and fines down the line. Or you can ask them yourself and see what they say. If they agree with you, great. If they change their mind later (it happens) then at least you can say you were working on information provided by them and that could save you from paying fines and interest.

nxbyveromdwjpg · 01-02-2018 11:14PM

barneystinson wrote: »

Your money in a bank account or stockbrokers account is little more than an IOU, should you only pay tax on share sales when you have a fat wad of notes in your hand..?

Well, not exactly since banks are stable (for the most part) and stockbrokers are insured and both are regulated.
A cryptocurrency exchange is just a website with a matching engine.

How much would the revenue want if I acquire assets in some game like Farmville and use them to acquire more assets in Farmville? Or work to get assets, in the video game?

AlmightyCushion · 01-02-2018 11:27PM

Amirah Cold Cafe wrote: »

Well, not exactly since banks are stable (for the most part) and stockbrokers are insured and both are regulated.
A cryptocurrency exchange is just a website with a matching engine.

How much would the revenue want if I acquire assets in some game like Farmville and use them to acquire more assets in Farmville? Or work to get assets, in the video game?

It depends. Are those Farmville assets worth anything? If you can make enough from selling farmville assets to bring you over the €1270 limit for CGT, why shouldn't tax be due on them like it is for every other type of asset?

Why do you think a BTC -> ETH trade should not be considered a disposal when a USD -> Yen trade is considered a disposal?

Peregrinus · 02-02-2018 02:42AM

Amirah Cold Cafe wrote: »

Well, not exactly since banks are stable (for the most part) and stockbrokers are insured and both are regulated.
A cryptocurrency exchange is just a website with a matching engine.

All you're saying there is that a holding in crypto is a riskier or dodger asset than a bank account, or a regulated broker's account.

This may be true, but so what? There are no exceptions, exemptions or special treatment in the CGT legislation for risky/dodgy assets. The dodginess that you point to is completely irrelevant when considering CGT treatment.

Peregrinus · 02-02-2018 02:50AM

lifeandtimes wrote: »

What if you started buying crypto in January.

Executed maybe 20 transactions while keeping a record of them, increased your portfolio by 20% and now want to leave them as they are for a few years to see if they gain any value.

As you haven't converted it back to fiat, I assume you still fill out a form but don't have to pay CGT yet?

Also what about the next few years, do you still have to fill out form every year even if you haven't made any more transacrions or withdrew your crytpo to fiat?

If all you have done is to acquire crypto, you have no CGT liablity and no reporting requirement.

But if you have disposed of any crypto (and this includes disposing of one crypto by swapping it for another crypto) then that's a disposal, there's a reporting obligation and, if there is a sufficiently large gain, there is a CGT liablity.

There are those who would like to think that this is not the case; that you can swap crypto all you like, but that you won't be regarded as disposing of any crypto unless and until you sell it for actual fiat money.

Attractive as this would be, it strikes me as very unlikely. There is nothing in the CGT legislation to support this view. If this treatment were to be afforded, I think it could only be by way of extra-statutory concession from the Revenue.

One poster in this thread did say that he had put this question to the Revenue through the online enquiry service, and been told that, yes, Revenue would only expect report and tax payment when crypto was disposed of for cash. This is very encouraging but, frankly, I wouldn't rely on a single anonymous claim on an internet discussion board. If this is relevant to your own tax situation, get your own clarification, in writing, direct from the Revenue. If you don't have that, you should assume that disposing of a holding of crypto is subject to the same reporting requirements and tax liabilities as disposing of any other asset. And, generally, when you swap one asset for another asset, that's a disposal and it comes with reporting requirements and potential tax liablities.

Cryptonovice · 02-02-2018 03:27AM

Peregrinus wrote: »

If all you have done is to acquire crypto, you have no CGT liablity and no reporting requirement.

But if you have disposed of any crypto (and this includes disposing of one crypto by swapping it for another crypto) then that's a disposal, there's a reporting obligation and, if there is a sufficiently large gain, there is a CGT liablity.

There are those who would like to think that this is not the case; that you can swap crypto all you like, but that you won't be regarded as disposing of any crypto unless and until you sell it for actual fiat money.

Attractive as this would be, it strikes me as very unlikely. There is nothing in the CGT legislation to support this view. If this treatment were to be afforded, I think it could only be by way of extra-statutory concession from the Revenue.

One poster in this thread did say that he had put this question to the Revenue through the online enquiry service, and been told that, yes, Revenue would only expect report and tax payment when crypto was disposed of for cash. This is very encouraging but, frankly, I wouldn't rely on a single anonymous claim on an internet discussion board. If this is relevant to your own tax situation, get your own clarification, in writing, direct from the Revenue. If you don't have that, you should assume that disposing of a holding of crypto is subject to the same reporting requirements and tax liabilities as disposing of any other asset. And, generally, when you swap one asset for another asset, that's a disposal and it comes with reporting requirements and potential tax liablities.

When u say reporting requirements are you referring to the CG1 return form?
When is the 2017 version of the CG1 form made available to us? The 2016 form is all I can find!

Peregrinus · 02-02-2018 03:35AM

Cryptonovice wrote: »

When u say reporting requirements are you referring to the CG1 return form?

Yes.

Cryptonovice wrote: »

When is the 2017 version of the CG1 form made available to us?

No idea, I'm afraid.

Cryptonovice wrote: »

The 2016 form is all I can find!

Well, you can always print it off, cross out "2016" wherever it appears and insert "2017", and away you go.

Noctifer · 02-02-2018 09:09AM

barneystinson wrote: »

Arguably then you are conducting a trade. You'd need to consider if you meet the badges of trade... http://lmgtfy.com/?q=Badges+of+trade

I have a sneaky feeling that lots of cryptocurrency "traders" as opposed to "investors" will emerge from the mist, if the arse falls out of cryptos... since a trade loss can be written off against other income in the same year...

That'd make for a really interesting thread!

There is nothing on the revenue site when it comes to those "Badges of Trade". Do you have any actual links? All I get are some UK things which are not relevant.

Peregrinus · 02-02-2018 09:42AM

Noctifer wrote: »

There is nothing on the revenue site when it comes to those "Badges of Trade". Do you have any actual links? All I get are some UK things which are not relevant.

Actually, they are relevant. The Irish tax imposes income tax on profits from "trade", without explicitly defining "trade". So does the UK legislation. In both cases, therefore, the question of whether a particular activity or pattern of activity does nor does not amount to a "trade" comes up quite a bit, and you look to court cases and commentary to answer the question, since the legislation is silent. Since the question being asked is the same in both jurisdictions, cases and commentary from one jurisdiction, while not binding in the other, are relevant and persuasive. The "badges of trade" is a term used by commentators who are attempting to summarise the, um, collective wisdom that can be gleaned from the relevant cases and rulings about what kind of characteristics an activity has to have in order to be considered a "trade" for income tax purposes.

And this is relevant to CGT because, if an activity is a trade whose profits are subject to income tax, then it's not within the charge to Capital Gains Tax, and vice versa.

Noctifer · 02-02-2018 09:05PM

So, assuming day trading is a trade an not actual investing, what should I do? Get an accountant?

Cryptonovice · 03-02-2018 12:27AM

I got a reply from the revenue today exactly 4 weeks later through Paye anytime. They said; “ You do not need to do anything until you sell the coins”. Then you pay on any gains made. We could be over thinking this whole thing.

To me the key word in their response was the word “sell”. I firmly believe the weren’t referring to disposing/swapping crypto for crypto.

Fakent.ie · 03-02-2018 12:28AM

Cryptonovice wrote: »

I got a reply from the revenue today exactly 4 weeks later through Paye anytime. They said; “ You do not need to do anything until you sell the coins”. Then you pay on any gains made. We could be over thinking this whole thing.

To me the key word in their response was the word “sell”. I firmly believe the weren’t referring to disposing/swapping crypto for crypto.

reply and ask them do they mean return the coins to euro or not. cheers mate

Cryptonovice · 03-02-2018 12:31AM

I did that straight away!

Fakent.ie · 03-02-2018 12:32AM

Cryptonovice wrote: »

I did that straight away!

Good man maybe they'll reply in 3 weeks this time

lifeandtimes · 03-02-2018 12:33AM

Cryptonovice wrote: »

I did that straight away!

Well check back in 4 weeks and see what they say

Cryptonovice · 03-02-2018 12:38AM

Ha! It’s slow but it’s probably the best way as whoever is replying can think about their reply and get it right. Sometimes phone calls puts people on the spot if their unsure.

Peregrinus · 03-02-2018 05:47AM

Cryptonovice wrote: »

Ha! It’s slow but it’s probably the best way as whoever is replying can think about their reply and get it right. Sometimes phone calls puts people on the spot if their unsure.

The problem with a phone call is that you don't have something that you can flourish at them afterwards. (Or that you can copy and show to others by, e.g., posting it here).

You're doing this in writing. It's slower, but it's the best way.

Fakent.ie · 03-02-2018 10:44AM

Peregrinus wrote: »

The problem with a phone call is that you don't have something that you can flourish at them afterwards. (Or that you can copy and show to others by, e.g., posting it here).

You're doing this in writing. It's slower, but it's the best way.

They record all phone calls and you can just record it yourself for future

barneystinson · 03-02-2018 10:57AM

Fakent.ie wrote: »

They record all phone calls and you can just record it yourself for future

They record some, for quality purposes, and they get deleted - long before the couple of years it'd take for a problem with a return to be likely to manifest. I'm not sure you'd be allowed to record the conversation without informing the other person, and/or use it subsequently.

Remember, even if some person in a call centre gives you dud info, you could still end up with a tax bill - the only thing you'd be spared is your interest & penalty. Much better to take the time to get a considered reply in writing.

If the query and its answer are committed to writing, there's more chance of the person drafting it taking the care to be correct.

nxbyveromdwjpg · 03-02-2018 11:27AM

AlmightyCushion wrote: »

It depends. Are those Farmville assets worth anything? If you can make enough from selling farmville assets to bring you over the €1270 limit for CGT, why shouldn't tax be due on them like it is for every other type of asset?

If I managed to sell the digital assets (that are valueless outside of the game) for euro, USD or yen, then of course I would expect to pay tax on that tangible gain.

AlmightyCushion wrote: »

Why do you think a BTC -> ETH trade should not be considered a disposal when a USD -> Yen trade is considered a disposal?

Tax on forex is well defined.

smacl · 03-02-2018 11:34AM

Fakent.ie wrote: »

They record all phone calls and you can just record it yourself for future

Having dealt with the Revenue for many years, as Peregrinus suggests, until you get it on headed Revenue paper signed and dated it isn't really going to stick. With a phone call, as a bare minimum you'd need the person stating their name and position at the start of the call and acknowledging that you were recording the call. They're not an organisation to muck about with.

Fakent.ie · 03-02-2018 11:37AM

smacl wrote: »

Having dealt with the Revenue for many years, as Peregrinus suggests, until you get it on headed Revenue paper signed and dated it isn't really going to stick. With a phone call, as a bare minimum you'd need the person stating their name and position at the start of the call and acknowledging that you were recording the call. They're not an organisation to muck about with.

When you ring the revenue it says its the revenue like 5 times before they even answer repeats itself in irish then they would usually pick up and say "Hi john here" or whatever.

Cryptonovice · 03-02-2018 10:25PM

If you want me to take screenshots and post here I will. If that is ok with the wider forum!

GreeBo · 03-02-2018 10:53PM

Cryptonovice wrote: »

I got a reply from the revenue today exactly 4 weeks later through Paye anytime. They said; “ You do not need to do anything until you sell the coins”. Then you pay on any gains made. We could be over thinking this whole thing.

To me the key word in their response was the word “sell”. I firmly believe the weren’t referring to disposing/swapping crypto for crypto.

Why would you think selling btc and being paid in ltc isn't selling?
Why do you firmly believe they are distinguishing between some currencies and not others? Your exchange certainly doesn't.

Cryptonovice · 03-02-2018 11:28PM

GreeBo wrote: »

Why would you think selling btc and being paid in ltc isn't selling?
Why do you firmly believe they are distinguishing between some currencies and not others? Your exchange certainly doesn't.

Well hopefully when they reply again in 4 weeks time we will finally know and it can be put too bed one way or the other!

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

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