Tax cryptocurrency ireland

Instead, they are treated in line with other transactions This is the wild west of investment. Money will be made by many, for sure, but others will suffer potentially crippling losses. This volatility is well illustrated in your case. It has since recovered much of its mojo — so much so that you are likely to be back on level terms if not ahead on your crypto trading so far. That depends on the nature of your interaction with crypto. Instead, they are treated in line with other transactions.

What that means is that if you were dealing in crypto as part of your trading operation — for instance by charging or accepting payment for your work as a tutor in crypto assets — they would be taxed as income or, if you were a limited company, under corporation tax. That being so, any losses you actually realised on your crypto investment by cashing out your position could be offset against gains made on the sale of shares or other assets this year. If enough gains were not made this year to offset such losses, they could be offset against gains in future years.

If you were acting as a day trader or close to, it could be argued that the transactions were part of your trading income. That would bring it back to the income tax regime, with losses offset against other income. Of course, so would gains and these could be taxed at 40 per cent plus universal social charge and possibly PRSI. However, in the limited circumstances outlined, my sense is that you will fall under the capital gains tax regime in line with your initial understanding.

This column is a reader service and is not intended to replace professional advice. Capital taxes Should a transaction be subject to capital gains tax, the chargeable gain should be taxable at the standard rate of 33 percent. The gain may be mitigated by any other capital losses the disponer may have carried forward or realised in the tax period. A return should be filed with Revenue noting the value of all crypto-assets on acquisition and disposal.

As these assets may be viewed as investments, the inheritance or gift of crypto-assets should be subject to capital acquisition tax CAT , which is charged at the rate of 33 percent. The reliefs that apply to acquiring any inheritance or gift should also apply in this instance.

Stamp duty As the currency exchanges most used are not based in Ireland, such transactions should be outside the scope of Irish Stamp Duty. It is recommended that this be reviewed on a case-by-case basis, however. The latest news to your inbox Please enter a valid email address You have entered an invalid email address.

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Again, no stamp duty should generally arise on the sale of crypto once the transaction is effected wholly online and no VAT should generally be due. Losses are also typically treated in the same way as individuals.

It is generally accepted there is less difficulty for a company, compared to an individual, to establish that it is carrying on a trade of dealing in financial assets but there nevertheless remains a high bar in establishing that the company has the necessary substance and sophistication to be carrying on a trade of buying and selling financial assets.

The view of the UK tax authorities is that a person will be subject to income tax or corporation tax when the crypto reward is received by the miner: if the mining is being carried out by a person in the course of a trade, then the person will be taxable on the trading profits from the mining, as recognised for accounting purposes. On this basis, the euro value at the time of receipt of the crypto awarded would be the taxable amount, but with a deduction allowed for any expenses of a non-capital nature incurred in earning that crypto.

Importantly, this means that mining may trigger a tax liability at a time when the miner has not earned any fiat cash. The miner may have to sell some of the crypto to fund this tax liability. Staking cryptocurrencies There is no Irish guidance on staking. Matheson will continue to keep a watch on developments in this space.

If you would like to discuss the legal issues arising out of this publication, please get in touch with Gerry Thorton , Jen Preston , Orla Dooley or your usual Matheson Tax Team contact. Check out our page that provides some information on where you can trade cryptocurrencies in Ireland It is important to know that Cryptotoassets are highly volatile unregulated investment products.

There is no EU investor protection. How much tax do you pay on Cryptocurrency or NFTs? Investing or Trading? A deciding factor on the taxation of cryptocurrency transactions is whether they are seen as an investment or are part of a business or trade. If the transactions are regarded as being a trading activity of a business — the profits will be subject to income tax or corporation tax. Revenue will usually treat the vast majority of trading in crypto or NFTs by individuals in Ireland as an investment rather than a business.

This is the same as any other capital gains or losses. This could be in exchange for regular fiat currency or other crypto-asset. For example, an exchange of Bitcoin for Dogecoin would be a disposal of Bitcoin and an acquisition of Dogecoin. The taxable gain or loss would be calculated by reference to the Euro equivalent values at the time of the exchange and at the time the Bitcoin was originally acquired. Less any personal exemption It is also worth noting that a return to Revenue of all disposals and acquisitions of assets are required each year for Irish taxpayers.

CGT on shares is slightly different.

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