Pintman Paddy Losty wrote: » Anyone following the story from Poland of at least €270m seized from a bank account and shell company linked to Bitfinex? It seems to be money laundered for Colombian drug cartels? Very strange story. Don't know what to believe... Anyone able to make sense of it?https://www.reddit.com/r/btc/comments/8ad509/polish_authorities_has_seized_almost_400_mln_eur/
Dades wrote: » Comprehensive crypto tax thread this way. Can this thread please be interesting again?
smacl wrote: » Yet if the companies business was solely trading in cryptos, such trades would not be investments, but rather normal transactions, so such principles would not apply. At worst it is ambiguous until such time as the revenue make a specific ruling on the matter. For example, you list property above which is a specific exception, there is no such statement in relation to cryptos at this point in time.
kaymin wrote: » Companies capital gains are computed in accordance with capital gains tax principles. Unless Revenue have confirmed to you that crypto assets are to be treated differently to other investment types such as shares, options, property etc then I don't see any way around this principle.
smacl wrote: » I'm not convinced. If your business is trading, whether it be cypto-coins, shares or fruit and veg, these trades are normal transactions and do not constitute sale or transfer of assets. I see a specific exception on the revenue site for lands, but not for any other goods, services or instruments.
kaymin wrote: » Splitting hairs - corporations pay CT on capital gains at the CGT rate:https://www.revenue.ie/en/companies-and-charities/capital-gains-for-companies/index.aspx
smacl wrote: » Reference for this please. According to the revenue (source); I know this is the case, have done this, and had a refund on that basis.
smacl wrote: » While I appreciate what you're saying to a large extent, you seem to be conflating capital gains tax, corporation tax and income tax here. Corporations don't pay CGT, they pay CT. If you own the company and have money coming in, you can take it as salary and pay income tax, or pay corporation tax and capital gains tax on profits you take out. Better than either if you're not in a hurry to get the money is put it into a directors pension plan, which is effectively tax-free salary, or re-invest in the company and hold your wealth in the company.
kaymin wrote: » Capital gains and losses are added together in determining your taxable profit for a single tax year. Capital losses from previous years can be carried forward (no time limits) and offset against future capital gains to reduce the taxable gain. You can't offset capital losses against prior year capital gains.
If a company sustains trading losses in an accounting period they can be offset as a means of a relief from tax against: other trading income for the same accounting periodtrading income for the immediately preceding accounting period.
Overall it is not tax efficient to hold an appreciating asset in a corporate vehicle - the corporation will have to pay CGT and then the shareholder will have to pay either CGT when selling the shares in the company or extracting accumulated income through salary or dividends (by way of higher income tax rates).
smacl wrote: » Don't know what the situation is for crypto, but you can certainly offset losses for recent previous years against this years profits. Not sure of the time frame, but I'd thought it was 2-3 years. If you think about it, it makes sense as many projects run for quite a few years, are expensive in the early years and make money on completion. It certainly seems that the assertion that you're liable for CGT on individual transactions as they occur, whether or not they involve FIAT, is bogus. FWIW, with CT you can also do the reverse, and get a refund for CT tax in the previous year against a loss made this year. Can't see this applying to CGT, which again makes using a company potentially more attractive.
Bob24 wrote: » Actually I was googleing this again and and found another source saying you can offset gains with losses (they even say you can carry over past losses to offset future gains the following years) : https://www.irishtimes.com/business/personal-finance/lose-some-win-some-offsetting-a-capital-loss-against-a-capital-gain-1.3075422 So I’m not sure but the way I read that article is that if you lost for exemple 50k selling a property 4 years ago and haven’t made capital gains since, you have a 50k “credit” that you can use anytime for exemple to no pay CGT on gains you are making on cryptocurrency or stocks this year. Is that right??
If you have made an investment in Bitcoin which resulted in a loss, and in the same year, made a separate investment in Etherum which resulted in a gain, you can use your loss from the Bitcoin to offset the gain you made from Etherum. Losses can also be used against capital gain made in later years.
There are a number of deductions that may be applied to a cryptocurrency CGT tax bill. These include: The cost of purchasing the asset Costs such as fees paid to a solicitor or auctioneer when you acquired and disposed of the asset Mining (see below) You can also adjust the purchase price ad enhancement expenditure for inflation.
If you are considering investing in cryptocurrency, keep in mind that 33% capital gains tax will be due on any profits over €1,270. Also remember that whether you make a profit or a loss, you will need to file a tax return each year.
Arthur Zealous Butcher wrote: » By the book, thats totally wrong unfortunately. There's an extensive thread on this somewhere.
If you own or part own an asset, you may sell, gift or exchange it. This is called a disposal. You may have to pay CGT on any gain that you make when you dispose of an asset. Companies normally include capital gains in their profits for Corporation Tax (CT) purposes.
Bob24 wrote: » The question was more do you owe CGT if you trade a cryptocurrency for another one. I am still not sure but it says here that "disposing of an asset doesn't just refer to the sale of an asset for money. It includes any transfer of ownership by way of exchange". So based on this exchanging Bitcoin for Tether does seem to constitute an asset disposal and therefore trigger CGT?
smacl wrote: » Not entirely sure but at a guess converting coins to FIAT on an exchange outside of Ireland isn't subject to CGT in Ireland until you transfer it into an Irish bank.
Bob24 wrote: » Even if you did trust Tether as a way to store your cash (disclaimer: don’t!), would that actually work? (i.e. is their no CGT when you trade an asset for another asset?)
Doodee wrote: » Not if you use Tether
Bob24 wrote: » smacl wrote: » Not really though, you can store FIAT on many exchanges without needing to withdraw to cash. I assume capital gain tax is due when you sell your cryptocurrency for fiat on the exchange (i.e. when you sell your asset); not when you withdraw the fiat from that exchange. So leaving the money on the exchange or withdrawing it to a bank account wouldn't change anything in terms of tax liabilities.
smacl wrote: » Not really though, you can store FIAT on many exchanges without needing to withdraw to cash.
Dades wrote: » And then income tax on top of that when you take the money out of the company.
smacl wrote: » on which you pay corporation tax.
Bob24 wrote: » Plus every time you sell you need to pay tax on the profits while the government won’t give you money if you make losses. So unless you know exactly what you’re doing and buying and selling all the time is probably not very tax efficient.
Dades wrote: » I'm not sure I agree with that. Making any profit isn't tax efficient. With crypto you can't safely leave a "profit" anywhere, as every coin is subject to huge swings, and your profit could be eroded very quickly over a short space of time. (On the plus side, you won't have as much tax to pay!)
Dohnjoe wrote: » Don't get me wrong, there is plenty of money to be made from buying/selling, but unless someone has seriously good knowledge of the market I wouldn't recommend it
