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

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Comments

  • #542
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    Peregrinus wrote: »
    It's not the Revenue's job to do your tax compliance for you. One of the points about a self-assessment system is that it gives the taxpayer a high degree of control, but also a high degree of responsibility.

    I disagree that there's a lack of information here. The CGT rules are well-established, and fairly clear and fairly consistent. Some doubt is being spread in this thread by people who don't like those rules and their outcome, and who are insisting that because crypto isn't exactly like any particular existing asset, therefore the CGT rules don't apply. But, really, if you look through this for the nonsense that it is and just apply established CGT principless, this isn't difficult. It's a pain, if you have entered into a large number of transactions, but tax compliance is always a pain if you have a large number of transactions.

    It's way too complicated. In my country it's simple. You don't make a gain till money gets on your bank account. This makes it really simple to report as it doesn't matter if you had 2 transactions or 10000.

    If I will have to spend hundreds each month just for the accountant, then I simply will not pay taxes on it in Ireland.


  • #543
    Peregrinus
    Registered Users, Registered Users 2 Posts: 27,441 ✭✭✭✭Peregrinus


    Noctifer wrote: »
    It's way too complicated. In my country it's simple. You don't make a gain till money gets on your bank account. This makes it really simple to report as it doesn't matter if you had 2 transactions or 10000.

    If I will have to spend hundreds each month just for the accountant, then I simply will not pay taxes on it in Ireland.
    You don't have to spend hundreds on an accountant. Tracking your trades is a bookkeeping exercise, not an accountancy one; you can do it yourself. Most probably, your exchange can generate a schedule of all your trades for the year; all you need to do is add in euro values (if the exchange doesn't provide them) and then calculate the gains which, if you have the thing in a spreadsheet, shouldn't require the services of a professional.


  • #544
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    Peregrinus wrote: »
    You don't have to spend hundreds on an accountant. Tracking your trades is a bookkeeping exercise, not an accountancy one; you can do it yourself. Most probably, your exchange can generate a schedule of all your trades for the year; all you need to do is add in euro values (if the exchange doesn't provide them) and then calculate the gains which, if you have the thing in a spreadsheet, shouldn't require the services of a professional.

    Sure, you go ahead and figure out what the price of LTC or ETH was 2 months ago when I traded them for BTC or ETH because I have no idea.

    Also, I will need an account since day trading is considered a trade.

    No wonder people are trying to avoid Revenue, it's way too complicated with opening a business, contacting your current employer to make sure there is no conflict of interest. Imagine you work in banking and your employer considers your second job a conflict of interest, what then?

    This whole thing is a mess.


  • #545
    GreeBo
    Registered Users, Registered Users 2 Posts: 27,474 ✭✭✭✭GreeBo


    Fakent.ie wrote: »
    Somone keeps mentioning euro to yen to usd and that those transactions are acctually taxed and comparing it to BTC to eth to LTC. but those are official countries currencies and accepted in hundreads and hundreads of places you go to an airport and you can swap your yen to euro and so on you can't go to an airport and swap your bitcoin to euro to use in europe thats just an example. tell me where you can use crypto i'd like to know

    This argument has been shown to be a fallacy several times, as demonstrated by your inability to buy anything with gold, or coal, or OJ or countless other assets.

    In any case, you can use BTC on expedia.com.


  • #546
    GreeBo
    Registered Users, Registered Users 2 Posts: 27,474 ✭✭✭✭GreeBo


    Noctifer wrote: »
    Sure, you go ahead and figure out what the price of LTC or ETH was 2 months ago when I traded them for BTC or ETH because I have no idea.

    Also, I will need an account since day trading is considered a trade.

    No wonder people are trying to avoid Revenue, it's way too complicated with opening a business, contacting your current employer to make sure there is no conflict of interest. Imagine you work in banking and your employer considers your second job a conflict of interest, what then?

    This whole thing is a mess.

    Welcome to being a grown up!

    Its no ones fault but your own that you didnt keep track of your transactions.
    I'm sure you can still get it from your exchange.


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  • #547
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    GreeBo wrote: »
    Welcome to being a grown up!

    Its no ones fault but your own that you didnt keep track of your transactions.
    I'm sure you can still get it from your exchange.

    Welcome to my tax being payed to another country and Revenue not getting any of it. If other countries can do a better job then I expect the same here.

    And how is it my fault that revenue nowhere mentions day trading as a business rather than investing? I have not heard of that till mentioned here, how is that my problem.


  • #548
    ZeroThreat
    Registered Users, Registered Users 2 Posts: 2,282 ✭✭✭ZeroThreat


    Noctifer wrote: »
    Welcome to my tax being payed to another country and Revenue not getting any of it. If other countries can do a better job then I expect the same here.

    And how is it my fault that revenue nowhere mentions day trading as a business rather than investing? I have not heard of that till mentioned here, how is that my problem.

    It's up to every citizen above the age of 18 to have a full working knowledge of the Irish system (and all our laws). Ignorance is no defence!


  • #549
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    ZeroThreat wrote: »
    It's up to every citizen above the age of 18 to have a full working knowledge of the Irish system (and all our laws). Ignorance is no defence!

    Please go find me the law that states what i investment and what is a trade. Ireland law, not some UK thing.


  • #550
    GreeBo
    Registered Users, Registered Users 2 Posts: 27,474 ✭✭✭✭GreeBo


    Noctifer wrote: »

    And how is it my fault that revenue nowhere mentions day trading as a business rather than investing? I have not heard of that till mentioned here, how is that my problem.

    What difference does that make to you keeping track of your trades?:confused:


  • #551
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    GreeBo wrote: »
    What difference does that make to you keeping track of your trades?:confused:

    I have all my trades, but I have no way of knowing how much was LTC or ETH worth the moment I traded it for BTC. There is not way you can get correct information on this since the price in a single minute can change multiple times.


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  • #552
    ZeroThreat
    Registered Users, Registered Users 2 Posts: 2,282 ✭✭✭ZeroThreat


    Noctifer wrote: »
    I have all my trades, but I have no way of knowing how much was LTC or ETH worth the moment I traded it for BTC. There is not way you can get correct information on this since the price in a single minute can change multiple times.

    According to Peregrinus above, the records generated by the exchanges will give you the (real) currency values at time of trade, no?


  • #553
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    ZeroThreat wrote: »
    According to Peregrinus above, the records generated by the exchanges will give you the (real) currency values at time of trade, no?

    They would for the BTC to EUR trade, for the LTC to BTC trade all I would get is info of how much BTC I would get for that LTC. However, because the price can be quite volatile I would have no idea what the price of LTC was the moment I sold it for BTC.

    The BTC/LTC exchange is a different entity from the LTC/EUR exchange.


  • #554
    Fakent.ie
    Registered Users, Registered Users 2 Posts: 161 ✭✭Fakent.ie


    ZeroThreat wrote: »
    It's up to every citizen above the age of 18 to have a full working knowledge of the Irish system (and all our laws). Ignorance is no defence!

    Makes sense without any speak of it in schools


  • #555
    Peregrinus
    Registered Users, Registered Users 2 Posts: 27,441 ✭✭✭✭Peregrinus


    Noctifer wrote: »
    I have all my trades, but I have no way of knowing how much was LTC or ETH worth the moment I traded it for BTC. There is not way you can get correct information on this since the price in a single minute can change multiple times.
    You must have had some notion of the value of LTC and ETH at time you made the trade; otherwise on what basis could you possibly have decided to make the trade?

    I get that the price of these assets is volatile. If the records generated by your exchange give you the time at which the trade was settled, and a price which is expressed in, or can be valued in, BTC, and BTC does have a value which is expressed in USD and which can be tracked over time, then you can construct a value for your LTC and ETH. If you can't place the time of a trade to closer than a day, then you can work on the basis of the mid-point of the range of values for that day. The revenue will accept any reasonably approach, I think, as long as you apply it consistently to all your trades, and don't try to value each trade on a consistent basis so as to produce the best tax outcome for yourself in respect of that trade.

    By choosing to trade in highly volatile assets you have created problems for yourself. (And not just tax problems - there are obvious investment risks associated with this.) These are not problems of the Revenue's making, and I don't think you can gather up your skirts and flounce away just because the Revenue refuses to simplify your affairs for you. Your liablity to tax doesn't depend on whether you enjoy your tax compliance work; it depends on where you are resident.

    As for whether you're carrying on an investment or a trade, Irish law doesn't have a rule about this because the legislature doesn't know exactly what you are doing; only you know that. You can lay the facts before the Revenue and ask them for a ruling, but you would be well advised to use the services of an accountant for that, to maximise the chance of getting the ruling which gives you the best outcome. You will need to think, however, about whether the "best outcome" is the one which gives you the lowest compliance burden, or the one which gives you the lowest tax bill. Again, this is something only you can decide; no-one else can decide your priorities for you.


  • #556
    GreeBo
    Registered Users, Registered Users 2 Posts: 27,474 ✭✭✭✭GreeBo


    Noctifer wrote: »
    They would for the BTC to EUR trade, for the LTC to BTC trade all I would get is info of how much BTC I would get for that LTC. However, because the price can be quite volatile I would have no idea what the price of LTC was the moment I sold it for BTC.

    The BTC/LTC exchange is a different entity from the LTC/EUR exchange.

    a) You surely had some idea at the time.
    b) You can still get some idea by looking at historical prices

    It doesnt have to be 100% guaranteed accurate, however it "being hard" is not a good enough reason to decide you are not going to do it at all.


  • #557
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    Peregrinus wrote: »
    Your liablity to tax doesn't depend on whether you enjoy your tax compliance work; it depends on where you are resident.

    Actually residency has nothing to do with it. You can trade crypto and make money from it without there being any link to you. I was hoping things would be better here, but the CGT is way too high and they complicated things. I think I will just give up and not pay tax here.


  • #558
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    GreeBo wrote: »
    a) You surely had some idea at the time.

    Actually no. I look at the price and do the purchase, but if the price drops a few seconds later or it doesn't go up I would make a loss. I rarely hold crypto for more than 10 minutes at a time.


  • #559
    GreeBo
    Registered Users, Registered Users 2 Posts: 27,474 ✭✭✭✭GreeBo


    Noctifer wrote: »
    Actually residency has nothing to do with it. You can trade crypto and make money from it without there being any link to you. I was hoping things would be better here, but the CGT is way too high and they complicated things. I think I will just give up and not pay tax here.

    Thats the equivalent of saying its not illegal if I dont get caught.
    Your liability is tied to your residency, end of.
    Noctifer wrote: »
    Actually no. I look at the price and do the purchase, but if the price drops a few seconds later or it doesn't go up I would make a loss. I rarely hold crypto for more than 10 minutes at a time.

    So you bought an asset without knowing if that asset was up or down against the asset you were using to buy it?
    Sure.


  • #560
    Fakent.ie
    Registered Users, Registered Users 2 Posts: 161 ✭✭Fakent.ie


    GreeBo wrote: »


    So you bought an asset without knowing if that asset was up or down against the asset you were using to buy it?
    Sure.

    I did that a lot too, to back him up, I never look at the euro/usd values when trading.


  • #561
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    GreeBo wrote: »
    Thats the equivalent of saying its not illegal if I dont get caught.
    Your liability is tied to your residency, end of.

    And how exactly would the know I own them tax? The exchange? I don't have an account on any of them. Bank transfers? I only get money from my employer and family members.
    GreeBo wrote: »
    So you bought an asset without knowing if that asset was up or down against the asset you were using to buy it?
    Sure.

    Have you ever seen the crypto market? The price can go down if you don't act quick enough. Just because the trade was a good idea 20 seconds ago doesn't mean it will be 30 seconds in the future.

    Mistakes can be made.


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  • #562
    GreeBo
    Registered Users, Registered Users 2 Posts: 27,474 ✭✭✭✭GreeBo


    Noctifer wrote: »
    And how exactly would the know I own them tax? The exchange? I don't have an account on any of them. Bank transfers? I only get money from my employer and family members.
    How would anyone know you are stealing unless you are caught?
    Its called self-reporting.
    Noctifer wrote: »
    Have you ever seen the crypto market? The price can go down if you don't act quick enough. Just because the trade was a good idea 20 seconds ago doesn't mean it will be 30 seconds in the future.

    Mistakes can be made.

    No I have never seen the crypto market :rolleyes:
    Failing to pay tax isnt a mistake, you want to make money from trading then pay the taxes due in the country you are in.
    It really is that simple.


  • #563
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    GreeBo wrote: »
    Noctifer wrote: »
    And how exactly would the know I own them tax? The exchange? I don't have an account on any of them. Bank transfers? I only get money from my employer and family members.
    How would anyone know you are stealing unless you are caught?
    Its called self-reporting.
    Noctifer wrote: »
    Have you ever seen the crypto market? The price can go down if you don't act quick enough. Just because the trade was a good idea 20 seconds ago doesn't mean it will be 30 seconds in the future.

    Mistakes can be made.

    No I have never seen the crypto market :rolleyes:
    Failing to pay tax isnt a mistake, you want to make money from trading then pay the taxes due in the country you are in.
    It really is that simple.
    It's their mistake. If they would have a proper documented system in place I would not mind, that's why I came here to ask questions. But looking at this thread there is a clear lack of information.
    Now why would I make such a stupid gamble and report taxes in a system that has no clear rules when I could just do in another country where things are clear?


  • #564
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,686 ✭✭✭barneystinson


    Noctifer wrote: »
    It's their mistake. If they would have a proper documented system in place I would not mind, that's why I came here to ask questions. But looking at this thread there is a clear lack of information.
    Now why would I make such a stupid gamble and report taxes in a system that has no clear rules when I could just do in another country where things are clear?

    You keep saying the rules aren't clear, where are you getting this from?

    It's only the wishful thinkers, wanting special rules applied to their interests, that think there's lack of clarity.

    CGT rules are very clear. Tax point is disposal of an asset. Trading one cryptocurrency for another is a disposal of an asset (and acquisition of a different one). Where's the lack of clarity?


  • #565
    Noctifer
    Registered Users, Registered Users 2 Posts: 85 ✭✭Noctifer


    barneystinson wrote: »
    Noctifer wrote: »
    It's their mistake. If they would have a proper documented system in place I would not mind, that's why I came here to ask questions. But looking at this thread there is a clear lack of information.
    Now why would I make such a stupid gamble and report taxes in a system that has no clear rules when I could just do in another country where things are clear?

    You keep saying the rules aren't clear, where are you getting  this from?

    It's only the wishful thinkers, wanting special rules applied to their interests, that think there's lack of clarity.

    CGT rules are very clear. Tax point is disposal of an asset. Trading one cryptocurrency for another is a disposal of an asset (and acquisition of a different one). Where's the lack of clarity?
    Where are the rules on how to calculate transactions? What about fees, especially fees paid in crypto? How are traders and investors in crypto defined?
    People mentioned badges of trade, yet there is no word on it on revenue site.


  • #566
    Fakent.ie
    Registered Users, Registered Users 2 Posts: 161 ✭✭Fakent.ie


    barneystinson wrote: »
    You keep saying the rules aren't clear, where are you getting this from?

    It's only the wishful thinkers, wanting special rules applied to their interests, that think there's lack of clarity.

    CGT rules are very clear. Tax point is disposal of an asset. Trading one cryptocurrency for another is a disposal of an asset (and acquisition of a different one). Where's the lack of clarity?

    2 emails from Revenue says thats not true aswell its obviously not clear


  • #567
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,686 ✭✭✭barneystinson


    Noctifer wrote: »
    Where are the rules on how to calculate transactions? What about fees, especially fees paid in crypto? How are traders and investors in crypto defined?
    People mentioned badges of trade, yet there is no word on it on revenue site.

    What rules on how to calculate transactions? Have you actually looked for guidance on that, as it most definitely is there. Costs of acquisition/disposal are deductible.

    As for what constitutes trade and the badges of trade: https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-02-06.pdf

    You'll see section 3 of the TCA referred to, which contains the definition of "trade" from which everything else then stems, so you can read the manual as being relevant to an individual as well as a company.


  • #568
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,686 ✭✭✭barneystinson


    Fakent.ie wrote: »
    2 emails from Revenue says thats not true aswell its obviously not clear

    2? Has someone posted up a second one?


  • #569
    Fakent.ie
    Registered Users, Registered Users 2 Posts: 161 ✭✭Fakent.ie


    barneystinson wrote: »
    2? Has someone posted up a second one?

    The guy who said it took them 4 weeks to reply


  • #570
    GreeBo
    Registered Users, Registered Users 2 Posts: 27,474 ✭✭✭✭GreeBo


    Noctifer wrote: »
    Where are the rules on how to calculate transactions? What about fees, especially fees paid in crypto? How are traders and investors in crypto defined?
    People mentioned badges of trade, yet there is no word on it on revenue site.

    You mean no one called over to your house and sat you down with a cup of tea to explain it all?

    What exactly have you researched yourself?

    It appears you haven't even looked at revenue.ie so excuse is for not having much sympathy.

    Btw you can't just move your tax liability somewhere else, it occurred where it occurred.


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  • #571
    Peregrinus
    Registered Users, Registered Users 2 Posts: 27,441 ✭✭✭✭Peregrinus


    Fakent.ie wrote: »
    The guy who said it took them 4 weeks to reply
    So then who posted the first one?


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