Looking for an easy way to avoid cryptocurrency taxes in Ireland?
While there’s no way to legally evade your taxes, there are simple strategies that can help you save thousands of dollars on your tax bill.
In this guide, we’ll break down 5 simple tax-saving tips that you can get started with today.
How is cryptocurrency taxed in Ireland?
In Ireland, cryptocurrency is subject to capital gains and ordinary income tax.
Capital gains tax: When you dispose of cryptocurrency, you’ll incur a capital gain or loss depending on how the price of your crypto has changed since you originally received it. Examples of disposals include selling your crypto, trading your crypto for another crypto, and giving crypto as a gift. Ordinary income tax: When you earn cryptocurrency, you’ll recognize income based on the fair market value of your crypto at the time of receipt. Examples of income include mining, staking, and referral rewards.
For more information, check out our
. guide to how cryptocurrency is taxed in Ireland What happens if you don’t pay crypto taxes?
Because cryptocurrency transactions are pseudo-anonymous, many investors assume that tax evasion is easy. This is simply not true.
Exchanges operating in Ireland are required to register as VASPs (Virtual Asset Service Providers) with the Central Bank. VASPs are required to carry out Customer Due Diligence and provide information to the Irish government upon request.
In addition it’s important to remember that all transactions on blockchains like Bitcoin and Ethereum are publicly visible. In the past, tax agencies across the world have analyzed blockchain transactions to match ‘anonymous’ wallets to known individuals.
How to avoid cryptocurrency taxes in Ireland #1: Hold your cryptocurrency
The easiest way to avoid taxes is to hold your cryptocurrency for the long-term. There is no taxable event when you hold your cryptocurrency or transfer it between different wallets that you own.
Remember, you’re only required to pay taxes when you
earn or dispose of your cryptocurrency holdings. #2: Harvest your losses
While taking losses on cryptocurrency is never the goal, it does come with a silver lining: tax benefits.
In Ireland, crypto losses can be used to offset 100% of your capital gains from cryptocurrency, stocks, and other assets.
If you have a net loss for the year, you can offset capital gains in future tax years. Alternatively, you can transfer your losses to your spouse or civil partner.
#3: Report trading fees
Reporting relevant fees can help you reduce your capital gains. Trading fees — such as exchange and blockchain fees — are considered allowable expenses that can be deducted from the sales price of your cryptocurrency.
#4: Move to a low-tax country
While it may seem like an extreme step to take, some investors do choose to relocate to other countries with lower crypto tax rates.
Many EU citizens choose to move to countries like Germany — where all cryptocurrency disposals after a year are completely tax-free.
For more information, check out our
. guide to crypto tax-free countries #5: Use crypto tax software
If you’re looking to accurately calculate your crypto tax liability quickly and easily,
crypto tax software for Ireland like CoinLedger can help. You can connect your wallets and exchanges to CoinLedger and generate a comprehensive tax report in minutes. In addition, CoinLedger can help you save thousands on your tax bill. We’ve helped more than 300,000 investors save money by automatically factoring in transaction fees and identifying crypto-assets with the biggest tax-saving potential. . Get started with a free CoinLedger account today