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

Noctifer · 07-02-2018 09:23AM

Peregrinus wrote: »

What makes you think that?

Sorry, forgot to put in the word Germany, my bad, it's still early.

GreeBo · 07-02-2018 09:25AM

What's the CGT status on crypto in La La Land?:rolleyes:

Noctifer · 07-02-2018 09:27AM

Peregrinus wrote: »

No, they're taxable because the disposal has occurred and the gain has been realised. If your strategy for not having them actually taxed involves concealing the disposal and the gain from the Revenue by not complying with your obligation to file a return of your gains, that's tax evasion.

How is that remotely relevant to your situation?

Since you ask, what you have here is a case of identity theft. Victims of identity theft can often be in a sticky situation (and not just with respect to the Revenue) but for an identity theft scam to be successful there has to be some link to the person who has stolen your identity where a link to you would be expected. In the case you suggest, for instance, presumably the person who has stolen your identity won't have arranged with the exchange to pay the disposal proceeds to your bank account; he'll have had them paid to his account. Proving that you're a victim of identity theft involves looking for the connections to your bank account, address, etc that should be there but aren't, or looking for connections to addresses, accounts, etc that are unconnnected with you.

But, as noted, this has nothing to do with the situation you currently face. Regardless of whether you comply with your tax return obligations today, you could someday be a victim of identity theft. That's unfortunate, but I don't see any connection between these two things.

My point was it's possible to trade under another persons name without there actually being any trace to you. If you do it with the identity of a person you know, and they pay all due taxes on the gain, you can get that money later on without paying taxes to revenue.

If someone has a family member in a country with better CGT than Ireland, they could trade under their name (assuming they trust them and the person is ok with it) without Revenue ever finding out.

Peregrinus · 07-02-2018 09:32AM

Noctifer wrote: »

Sorry, forgot to put in the word Germany, my bad, it's still early.

I'm open to correction here by someone with greater knowledge, but I think the position in Germany is that gains on the disposal of assets held for longer than 12 months are exempt if the asset was acquired before 1 January 2009. But the rules were changed then, and for any asset acquired after that date the gain on disposal will be taxable regardless of how long the asset has been held.

Peregrinus · 07-02-2018 09:35AM

Noctifer wrote: »

My point was it's possible to trade under another persons name without there actually being any trace to you. If you do it with the identity of a person you know, and they pay all due taxes on the gain, you can get that money later on without paying taxes to revenue.

No, you can't, not lawfully. The tax some other taxpayer has paid in some other country has no effect at all on your liability to pay tax in Ireland.

Noctifer wrote: »

If someone has a family member in a country with better CGT than Ireland, they could trade under their name (assuming they trust them and the person is ok with it) without Revenue ever finding out.

A strategy which works only so long as the Revenue never find out about it is pretty much the definition of tax evasion, Noctifer.

Cryptonovice · 07-02-2018 09:35AM

Lets say I buy coin A in December of 2017. I swap it for another coin and get no where near the €1270 limit. When the end of jan the following year comes around I don't pay any cgt or submit the later period form as I haven't made the gains.
What happens if between feb 1st and October 31st (when we do cg1 form) coin B skyrockets...do we pay cgt with the cg1 form?

Peregrinus · 07-02-2018 09:42AM

Cryptonovice wrote: »

Lets say I buy coin A in December of 2017. I swap it for another coin and get no where near the €1270 limit. When the end of jan the following year comes around I don't pay any cgt or submit the later period form as I haven't made the gains.

You should make a return of gains in form CG1 showing your gain, even though it's less than €1270 and therefore you have no CGT liability. In theory at any rate, you can be fined for failing to make a return even if you have no CGT liability. The only circumstance in which you don't have to make a return is when you don't have any gains.

Cryptonovice wrote: »

What happens if between feb 1st and October 31st (when we do cg1 form) coin B skyrockets...do we pay cgt with the cg1 form?

Nothing happens. The return you file iin form CG1 is for the year 2017. It doesn't cover anything that happens in 2018.

Plus, even when you come to file a return for 2018, nothing still happens. A rise in the value of your assets is not a taxable event, and doesn't have to be reported. There'll be no taxable event in this scenario until you actually dispose of some or all of your holding of coin B.

Cryptonovice · 07-02-2018 09:54AM

Peregrinus wrote: »

You should make a return of gains in form CG1 showing your gain, even though it's less than €1270 and therefore you have no CGT liability. In theory at any rate, you can be fined for failing to make a return even if you have no CGT liability. The only circumstance in which you don't have to make a return is when you don't have any gains.

Nothing happens. The return you file iin form CG1 is for the year 2017. It doesn't cover anything that happens in 2018.

Plus, even when you come to file a return for 2018, nothing still happens. A rise in the value of your assets is not a taxable event, and doesn't have to be reported. There'll be no taxable event in this scenario until you actually dispose of some or all of your holding of coin B.

Deadly. Thanks again.

Noctifer · 07-02-2018 10:11AM

Peregrinus wrote: »

I'm open to correction here by someone with greater knowledge, but I think the position in Germany is that gains on the disposal of assets held for longer than 12 months are exempt if the asset was acquired before 1 January 2009. But the rules were changed then, and for any asset acquired after that date the gain on disposal will be taxable regardless of how long the asset has been held.

They changed the rules then? I know before I moved to Ireland I was reading up on it and what I got from it crypto was exempt if help over 1 year with the FIFO system.

Noctifer · 07-02-2018 10:14AM

Peregrinus wrote: »

A strategy which works only so long as the Revenue never find out about it is pretty much the definition of tax evasion, Noctifer.

Not denying that at all. It's exactly that. But there is no way way of them for finding out especially for someone like me who might not be in this country in 5 years.

Peregrinus · 07-02-2018 11:09AM

Noctifer wrote: »

They changed the rules then? I know before I moved to Ireland I was reading up on it and what I got from it crypto was exempt if help over 1 year with the FIFO system.

Well, as I say, others may know more about this than me; I know even less about the German tax system than I do about the Irish. But my understanding is (a) there are no special rules for crypto in Germany, any more than there are in Ireland; (b) there is a twelve-month-holding exemption for securities (for land, you would nee to have held it for 10 years); and (c) its availability depends on the date the asset was acquired - before or after 1 Jan 2009.

Obviously, that can't benefit crypto investors; nobody can have held crypto from before 1 January 2009. So maybe there's another 12-month-holding rule that the crypto investors can shoehorn themselves into but, if there is, I haven't heard about it. But, then, why would I?

bebeman · 07-02-2018 11:09AM

Peregrinus wrote: »

Move to one of these places, wait three years so that you cease to be ordinarily resident in Ireland for tax purposes, hope to God that your crypto does not decline in value during this period and then cash out.

Convert crypto to BTC/ETH/LTC send to Bitstamp, sell for €/$, dont care if crypto price drops, you can do the same on Coinbase.

barneystinson · 07-02-2018 11:10AM

Noctifer wrote: »

Not denying that at all. It's exactly that. But there is no way way of them for finding out especially for someone like me who might not be in this country in 5 years.

So now you're back to acknowledging that what you propose is tax evasion; that's progress.

However you absolutely did deny that it's tax evasion, multiple times, starting here I think:

Noctifer wrote: »

That's for me to decide, not them. After all, it is called a self assessment system, thus my assessment is I don't own them any tax.

There are legal ways to go about this.

If you ever do end up dealing with Revenue, you'll need to better able to pick a narrative and stick to it, or you'll tie yourself up in knots.

GreeBo · 07-02-2018 11:17AM

bebeman wrote: »

Convert crypto to BTC/ETH/LTC send to Bitstamp, sell for €/$, dont care if crypto price drops, you can do the same on Coinbase.

Then you are liable for CGT in Ireland as you have realised a gain.

Forget about the idea that its only a gain if it hits your bank account.

Peregrinus · 07-02-2018 11:17AM

Noctifer wrote: »

Not denying that at all. It's exactly that. But there is no way way of them for finding out especially for someone like me who might not be in this country in 5 years.

Everybody who runs a tax evasion scam that depends on the Revenue never finding out reckons that there is no way they will find out. Sometimes they're right; sometimes they're wrong. Sometimes what seems like a plausible hope that they'll never find out becomes implausible as events unfold; information systems are improved, reporting requirements are changed, Revenue information-sharing is widened, Panama Papers get leaked, etc.

But none of this changes the fact that, whether it works or not, it's criminal evasion, which is what you were in denial about earlier on.

Plus, if it does get found out, the downside risk is very severe. You (or Uncle Hansi) will pay about 26% tax in Germany, plus 33% in Ireland, plus a 33% surcharge, plus Revenue interest. You'll get no credit for the tax poor Uncle Hansi paid. The total tax take, between Ireland and Germany, could easily exceed 100% of the gain. Whereas if the strategy works, your saving is just 7% - the difference between the Irish and German tax rates - plus avoiding the inconvenience of having to calculate your gains. Morality aside, it looks like a poor gamble.

GreeBo · 07-02-2018 11:19AM

Noctifer wrote: »

Not denying that at all. It's exactly that. But there is no way way of them for finding out especially for someone like me who might not be in this country in 5 years.

Why are you even posting in this thread?

You are openly stating that you are going to evade paying any taxes in Ireland...so why do you care about anything that anyone else is posting?

You started out saying that it was revenues fault as it was too difficult, then you would trade in someone elses name and now you are back to "well they wont find me"

Seriously, just stop posting. I for one am now ignoring you.

ZeroThreat · 07-02-2018 11:33AM

Peregrinus wrote: »

Everybody who runs a tax evasion scam that depends on the Revenue never finding out reckons that there is no way they will find out. Sometimes they're right; sometimes they're wrong. Sometimes what seems like a plausible hope that they'll never find out becomes implausible as events unfold; information systems are improved, reporting requirements are changed, Revenue information-sharing is widened, Panama Papers get leaked, etc.

But none of this changes the fact that, whether it works or not, it's criminal evasion, which is what you were in denial about earlier on.

Plus, if it does get found out, the downside risk is very severe. You (or Uncle Hansi) will pay about 26% tax in Germany, plus 33% in Ireland, plus a 33% surcharge, plus Revenue interest. You'll get no credit for the tax poor Uncle Hansi paid. The total tax take, between Ireland and Germany, could easily exceed 100% of the gain. Whereas if the strategy works, your saving is just 7% - the difference between the Irish and German tax rates - plus avoiding the inconvenience of having to calculate your gains. Morality aside, it looks like a poor gamble.

From what I've been told by an ACCA tax lecturer with many years of experience, revenue only employ the best of the best and the sharpest. Eventually they track down pretty much anyone trying to hide earnings or anything from the government, no matter how long it takes.

bebeman · 07-02-2018 11:34AM

Money will flow from crypto to countries that dont have CGT on it.
CGT is 33%, and people will try avoid paying it, but if they can cash out legally in Ireland and keep all profits they will have zero issues spending it and the government will get 23% VAT.
Sure the VAT and VRT on a Lambo would be over 50%,
My opinion is Ireland wont want to miss out on this money being spent and the VAT collected, they will change the tax law to be inline with countries that dont have CGT on crypto within this year if crypto breaks the trillion dollar MC.
Too much easy tax money will be missed if it stays as it is.

Peregrinus · 07-02-2018 11:49AM

bebeman wrote: »

Money will flow from crypto to countries that dont have CGT on it.
CGT is 33%, and people will try avoid paying it, but if they can cash out legally in Ireland and keep all profits they will have zero issues spending it and the government will get 23% VAT.
Sure the VAT and VRT on a Lambo would be over 50%,
My opinion is Ireland wont want to miss out on this money being spent and the VAT collected, they will change the tax law to be inline with countries that dont have CGT on crypto within this year if crypto breaks the trillion dollar MC.
Too much easy tax money will be missed if it stays as it is.

Noctifer isn't suggesting that he'll spend his gains in Germany; just that he'll book them in Germany in a relative's name, but they'll eventually come to him and, if he's living in Ireland when he spends them, them Ireland will get the VAT, excise, etc associated with his spending.

CGT only leads to these downstream losses of other taxes if people are actually motivated to emigrate to avoid it. Same goes for income tax rates, of course. And, while that's an issue, it's not an issue for earnings on crypto in particular. If it's a problem, you need to lower tax rates generally, not carve out earnings from crypto investment in particular.

Noctifer · 07-02-2018 11:49AM

GreeBo wrote: »

Why are you even posting in this thread?

You are openly stating that you are going to evade paying any taxes in Ireland...so why do you care about anything that anyone else is posting?

You started out saying that it was revenues fault as it was too difficult, then you would trade in someone elses name and now you are back to "well they wont find me"

Seriously, just stop posting. I for one am now ignoring you.

Actually I stated early on in the thread that I already cashed out money from my exchange to an Irish bank account so there is no way that Revenue will not find out.

I also plan to contact an accountant to help me with preparations for reporting my gains at the end of the year (unless for some reason I leave Ireland and I won't be a tax resident this year either).

However, if things end up being really complicated and cause issues I would officially stop trading crypto, report only the gains I made for the 2 months this year and then carry on with my tax evasion schema.

Noctifer · 07-02-2018 12:22PM

Interesting, a gift from a parent to a child is free from tax up to 310k.

Peregrinus · 07-02-2018 12:35PM

Noctifer wrote: »

Interesting, a gift from a parent to a child is free from tax up to 310k.

Free from Capital Acquisitions Tax. That's a different tax from Capital Gains Tax, so I'm not sure if this offers you much in the way of useful tax planning opportunities in the present context.

(And, for the record, it's not a gift. It's all gifts, in aggregate.)

Noctifer · 07-02-2018 12:40PM

Peregrinus wrote: »

Free from Capital Acquisitions Tax. That's a different tax from Capital Gains Tax, so I'm not sure if this offers you much in the way of useful tax planning opportunities in the present context.

(And, for the record, it's not a gift. It's all gifts, in aggregate.)

As long as the gift giver payed tax on the gift you are fine as long as it's under the 310k total.

Peregrinus · 07-02-2018 12:46PM

Noctifer wrote: »

As long as the gift giver payed tax on the gift you are fine as long as it's under the 310k total.

Yes. But I'm not seeing how that helps you. If you gift your holdings of bitcoin or whatever to your children, they don't have a problem (as long as none of them receives more than 310k in aggregate). But your giving the stuff is a disposal; because it's a disposal to a connected party - a child - you are deemed to have disposed of it for market value, your capital gains are computed on that basis, and if the gain exceeds 1,270 you'll be liable to CGT.

Noctifer · 07-02-2018 12:49PM

Peregrinus wrote: »

Yes. But I'm not seeing how that helps you. If you gift your holdings of bitcoin or whatever to your children, they don't have a problem (as long as none of them receives more than 310k in aggregate). But your giving the stuff is a disposal; because it's a disposal to a connected party - a child - you are deemed to have disposed of it for market value, your capital gains are computed on that basis, and if the gain exceeds 1,270 you'll be liable to CGT.

I know that. The idea would be for example my parent reports CGT in another country and then gifts it to me in Ireland. That would be with the tax evasion idea. And the 310k is a lot less than what it is in my country for gifts.

It's an options, will see if there is any need for it.

barneystinson · 07-02-2018 01:52PM

Noctifer wrote: »

Actually I stated early on in the thread that I already cashed out money from my exchange to an Irish bank account so there is no way that Revenue will not find out.

I also plan to contact an accountant to help me with preparations for reporting my gains at the end of the year (unless for some reason I leave Ireland and I won't be a tax resident this year either).

However, if things end up being really complicated and cause issues I would officially stop trading crypto, report only the gains I made for the 2 months this year and then carry on with my tax evasion schema.

Let us know what your accountant thinks of that last bit, will you?

Noctifer · 07-02-2018 02:01PM

barneystinson wrote: »

Let us know what your accountant thinks of that last bit, will you?

Why would I ask an Irish account something not related to to Irish tax? As long as I do things properly there is no way of them ever finding out.

barneystinson · 07-02-2018 02:13PM

Noctifer wrote: »

Why would I ask an Irish account something not related to to Irish tax?.

I think you aren't great at picking up on sarcasm...

Noctifer wrote: »

As long as I do things properly there is no way of them ever finding out.

The tax defaulters list published every quarter is full of people who told themselves exactly that.

Noctifer · 07-02-2018 02:17PM

barneystinson wrote: »

he tax defaulters list published every quarter is full of people who told themselves exactly that.

There is a non existent list of people who get away with it and have been getting away with it for years. Too bad Revenue can't publish that list.

GreeBo · 07-02-2018 02:21PM

Thread.
Ruined.

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

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