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

Frozen Veg wrote: »

When doing your PAYE annual return, where do you declare the crypto profits? Is it under 'other income' 'trading profits'?

Unless you are literally carrying out enough trades every day for it it to be considered trading income (which for 99% of people it won't), you need to complete a pdf form CG1 declare your chargeable gains/losses on that form. You need to familiarise yourself with the rules of CGT.

Frozen Veg wrote: »

Okay so fill out the hard copy CG1 Form and post it to revenue and make the tax payment electronically?

That's it. You could fill out the pdf on your your device and upload it to them via MyEnquiries in your Revenue MyAccount to have a record of it and to save yourself printing etc.

I'm going to ask some stupid questions, please explain to my like I'm 5:

Is the exchange of one Crypto for another Crypto a taxable event? So if I were to exchange BTC for USDT, and sell USDT for Euro, I'd owe tax both on the BTC-USDT exchange as well as USDT to Euro exchange, effectively being taxed twice? I'd only be making profit on the BTC to USDT exchange anyway, but it makes keeping records of it and filing it trickier.

What about with DEXes like Uniswap? Do I owe tax on exchanging ETH for some sh1tcoin, then tax on exchaning that sh1tcoin back to ETH, and then on selling that ETH for euro?

How is staking taxed? For example, if I were to stake VET and generate VTHO, do I owe an income tax on that VTHO or do I pay capital gains on the VTHO if/when I sell it? I presume then this would increase my yearly income in combination with my day job, and might put me in a higher tax bracket?

Are there lower rates for businesses when it comes to holding and selling crypto assets, as well as staking?

Thanks!

Brontosaurus wrote: »

I'm going to ask some stupid questions, please explain to my like I'm 5:

Is the exchange of one Crypto for another Crypto a taxable event? So if I were to exchange BTC for USDT, and sell USDT for Euro, I'd owe tax both on the BTC-USDT exchange as well as USDT to Euro exchange, effectively being taxed twice? I'd only be making profit on the BTC to USDT exchange anyway, but it makes keeping records of it and filing it trickier.

Yes it's taxable, but only on the gains. So if you exchanged BTC for USDT, you're liable for any gains arising from the difference between the price you bought BTC at and the price you sold back into USDT. But USDT is a stable coin so converting back to euro shouldn't trigger any profit.

What about with DEXes like Uniswap? Do I owe tax on exchanging ETH for some sh1tcoin, then tax on exchaning that sh1tcoin back to ETH, and then on selling that ETH for euro?

Yes, doesn't matter where you sold. You owe 33% on the gains of any transaction, even if it's not converted to euro.

How is staking taxed? For example, if I were to stake VET and generate VTHO, do I owe an income tax on that VTHO or do I pay capital gains on the VTHO if/when I sell it? I presume then this would increase my yearly income in combination with my day job, and might put me in a higher tax bracket?

This is unclear it seems. Some people saying its 33% but others saying it's taxed as income. So I don't actually know sorry.

Are there lower rates for businesses when it comes to holding and selling crypto assets, as well as staking?

No idea!

Brontosaurus wrote: »

I'd love for them to actually clarify these things but I guess that would require them to understand how Crypto works...

That's the problem right now. It's very hard for anyone to pay a bill when they don't know how much it is.....

Brontosaurus wrote: »

That clears some things up, thanks! As for staking; so some people are paying 33% CGT and others are paying income tax on it? That would imply that revenue is accepting BOTH...I'd love for them to actually clarify these things but I guess that would require them to understand how Crypto works...

If you want them to clarify it, you can ask them for a ruling on your own case. They wouldn't need an understanding of "how crypto works"; just of how staking does. And if you understand how staking works, it seems a little condescending to assume that they couldn't.

We have a self-assessment system, one of the consequences of which is that there is some scope for different taxpayers to treat similar transactions/events differently. This isn't a problem when it happens on a small scale or in a niche area; if anything its a slight benefit to taxpayers, because there is some scope for choosing the treatment which produces the best outcome for the individual taxpayer.

If it becomes a big enough issue the revenue can issue guidance. In that situation taxpayers who, in good faith, have previously used a tax treatment that the guidance says is incorrect will not be penalised, but they'll be expected to conform to the guidance for the future (or, if they prefer, take the matter to the Appeal Commissioners and test the correctness of the guidance).

Im no expert, but from what I understand, you only pay CGT on whatever profit you have made, with the 1st €1270 of profit being tax free.

Im sure somebody with more expertise will confirm or deny.

Connie

pioneerpro wrote: »

You only pay CGT once you realise a gain on the asset - via trading, disposing etc... So if you just mean a simple fiat -> cyrpto purchase in 2017, then obviously your capital (the initial purchase price) doesn't factor in.

Formula for CGT owed before you hit your threshold per annum is basically (Gain from Disposal - Purchase Price x 0.33) - €1,270

i have worked it out and would be up about 900, so minus 1270 is '- 370'. Do i even have to submit a tax return in this case?

Just in case anyone is confused by CGT calculations, you may wish to familiarise yourself with Revenue's examples.

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-to-calculate-cgt.aspx

It's Sale price minus allowable expenses (that includes your purchase price) to arrive at your chargeable gain. You then deduct your annual exemption of €1270 to give your taxable gain. You then multiply your taxable gain by 33% to arrive at the amount of CGT to pay.

bfa1509 wrote: »

The irony that a technology created to remove the middleman is now regulated and controlled by the middleman.

Who the hell are crypto service providers in Ireland? I've never heard of anybody using any exchange that doesn't use KYC stuff - e.g. Kraken.

Peregrinus wrote: »

The legislation doesn't apply just to crypto service providers who themselves are based in Ireland, but also to crypto service providers based elsewhere who are providng services in Ireland - i.e. to Irish-resident customers.

It's an EU-wide thing, so service providers based anywhere in the world providing services to EU customers have three options:

1. Stop providing services to EU customers.

2. Register with national authorities in each EU member state where they provide services, and comply with the regulatory requirements.

3. Provide services illegally.

Most will choose option 2. Some will choose option 1. A few may choose option 3, but you'd want to be fairly desparate to let your crypto assets be held on your behalf by someone who's a law-breaker by policy. So the market for those offering services illegally will probably be fairly small and specialised.

It's not clear yet if this applies to crypto service providers not based in Ireland. The registration requirement is not EU wide, its just a thing that Ireland added to their legislation for god knows why.

Central bank site mentions firms 'established in Ireland', that sounds to me like Irish based & registered companies.

Regardless the AMLv5 legislation has been law for a while now in Europe so any EU based crypto exchange worth their salt will already be compliant in that regard. This new (Irish only I might add) requirement to register your crypto service is just another ridiculous Irish-ism where we for some reason decided to put additional unnecessary roadblocks in the way of innovation and enterprise.

pioneerpro wrote: »

You only pay CGT once you realise a gain on the asset - via trading, disposing etc... So if you just mean a simple fiat -> cyrpto purchase in 2017, then obviously your capital (the initial purchase price) doesn't factor in.

Formula for CGT owed before you hit your threshold per annum is basically (Gain from Disposal - Purchase Price x 0.33) - €1,270

Why is your advice different to what revenue say? https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-to-calculate-cgt.aspx



If gain from disposal is 5000, purchase price is 50:



You think it is:

(5000 - 50)*0.33 - 1270 = 363.5 cgt to be paid


Revenue says:
((5000 - 50)-1270)*0.33 = 1214.4 cgt to be paid

Hi all, I have a query on transferring funds. So I invested in an eth tracker fund on my DEGIRO account but I’d like to move it to ethereum on Coinbase. Is there a way that I could transfer with out being liable for tax on the profit or is it a case of my only option being taking it out of the tracker fund, paying the cgt and then investing through my Coinbase acc?

donnaille wrote: »

Without knowing the detail, it sounds like these are different investment products - selling on DEGIRO will indeed trigger a CGT event.

Yeah they are completely different, I assumed there was no way around it but I wasn’t sure so thought I would check here.

When I invested in the eth tracker fund I didn’t even know what staking etc was but now that I do I want to invest in ethereum rather than the tracker but to do so I’ll have a tax liability unfortunately!