Do you have to pay tax on cryptocurrency ireland

So, for example, John buys a bicycle from Mary with bitcoin, in order to ensure that this bitcoin is genuine, miners verify the transaction. If you can be the miner to successfully verify the transaction you can earn yourself newly generated bitcoins. What you will need is some software and specialised hardware. The cost of acquiring these can be expensed against your CGT liability. Do I still need to pay tax? Yes, you will need to pay tax, even if you intend to gift your investment to another person.

To calculate your tax liability you should use the market value of the asset at the date the gift was given. Also, if you want to use your investment to pay a debt, you will need to pay tax on your investment before it is transferred to the creditor. If you have been investing in cryptocurrency for a few years, but have yet to pay tax on your profits, it is advisable to contact Revenue right away by making an unprompted qualifying disclosure.

This is a disclosure that you enact before you are notified of an audit or contacted by Revenue regarding an inquiry or investigation. You should include the payment for any tax due, although it may be possible to pay this in instalments. It is also likely that some penalties will also be applied to any proposed settlement. In a case where a penalty arises the amount of the penalty is generally determined by Revenue.

And, regardless of whether you make a profit or loss on your investment, you will need to file a tax return each year. If filing a CGT tax return sounds like a pain, why not let Taxback. Our team can file your return for you and answer any cryptocurrency tax questions you may have.

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. See more here about Capital Gains Tax on Shares in Ireland Income Tax on Cryptocurrency Trading Individual taxpayers that are trading in cryptocurrency as a business will be liable to income tax on the profits. Profits and losses of a non-incorporated business i,e.

Corporation Tax The profits and losses of an incorporated company entering into transactions involving cryptocurrency should be reflected in accounts and will be taxable under normal Corporation Tax rules. Revenue does not treat cryptocurrencies as a functional currency — therefore business accounts, for tax purposes, cannot be prepared in cryptocurrencies. Euro or other functional currency accounts must be prepared.

Where the wages of an employee are paid in a cryptocurrency, the value for the purposes of calculating payroll taxes is the Euro amount attached to the cryptocurrency at the time the payment is made to the employee. Returns to Revenue must be shown in Euro amounts and remittances made appropriately. In the same way as any other gift of money or assets.

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