Crypto tax in Ireland

circumstances. The sale, transfer, or redemption of crypto-assets is most likely to be a disposal for CGT purposes unless, based on the facts and circumstances, there is a trade of dealing in crypto-assets being carried on.

circumstances. The sale, transfer, or redemption of crypto-assets is most likely to be a disposal for CGT purposes unless, based on the facts and circumstances, there is a trade of dealing in crypto-assets being carried on.

Later in the year, Dave used crypto-assets to purchase goods in a local café. This use of crypto-assets is a disposal for CGT purposes upon which Dave must calculate the gain arising, declare the gain to Revenue by filing a tax return and pay any CGT arising.

2.3 Mining Income received from cryptocurrency mining activities will generally be outside the scope of VAT on the basis that the activity does not constitute an economic activity for VAT purposes.

6 Capital Acquisitions Tax (CAT) – Gifts and Inheritances The receipt of crypto-assets by way of gifts or inheritance may need to be considered in relation to a liability to CAT. The valuation of the crypto-asset received for CAT purposes is the Euro equivalent market value of the asset at the valuation date of the gift or inheritance.

Where an individual incurs a loss on the disposal of an asset, that loss can (in most cases) be deducted from a chargeable gain in the same period. If the loss in a period is greater than total chargeable gains in that period, the remaining loss can be carried forward to future periods for use against future chargeable gains.

5 Taxation of Crypto-Assets for PAYE (only) Employees Tax on income earned through employment is collected through the PAYE system. An individual in receipt of income subject to PAYE must also declare additional sources of income or gains to Revenue on an annual return of income through MyAccount on www.revenue.ie. Where such an individual has a gain on the disposal of a crypto-asset, which is subject to CGT, that individual will have to file a return.

1.4 CGT– Important Dates There are two different periods for CGT purposes each year. The initial period starts on 1 January and ends on 30 November. The tax due for this period must be paid on or before 15 December of the same year. The latter period starts on 1 December and ends on 31 December. The tax due for this period must be paid on or before 31 January of the following year.

Each year, the first €1,270 of an individual’s total chargeable gains (after deducting losses, if any) are exempt from CGT. This “annual personal exemption” can only be used to reduce a chargeable gain. For example, if an individual’s total chargeable gains are less than €1,270 e.g. €960, the annual exemption is limited €960 only, the remaining €310 cannot be used. Any remaining chargeable gain is taxed at the appropriate rate of CGT.