Ireland cryptocurrency taxes
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The Ultimate Guide to Ireland Cryptocurrency Taxes in 2022

Irish citizens are investing more money in cryptocurrency, and Ireland’s Revenue Commissioners is taking notice.

In recent years, the cryptocurrency ecosystem has boomed. Recent polls show that as many as 1 in 10 Irish investors now own cryptocurrency. As a result, Ireland’s government is paying closer attention to digital assets than ever before.

In this guide, we’ll break down everything you need to know about how crypto-assets are taxed in Ireland (including a few simple tips to help you save money on your tax bill).

Ireland cryptocurrency taxes

Chapter 1

The fundamentals of cryptocurrency tax

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Is cryptocurrency taxed in Ireland?

Yes. In Ireland, cryptocurrency is subject to capital gains and income tax.

How capital gains tax works

When you dispose of cryptocurrency, you’ll incur a capital gain or loss depending on how the price of your coins has changed since you originally received them.

You can calculate your gain/loss using the following formula.

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Here’s an example of the formula in action.

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Capital gains tax examples

Here are a few examples of disposals subject to capital gains tax.

  • Selling cryptocurrency
  • Using cryptocurrency to make a purchase
  • Trading cryptocurrency for other cryptocurrencies
  • Gifting cryptocurrency

Income tax on cryptocurrency

If you’re trading cryptocurrency as a business or earning cryptocurrency, you’ll recognize income.

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Here are a few examples of crypto income events.

  • Trading crypto as a business
  • Earning crypto in exchange for labour
  • Airdrops
  • Mining cryptocurrency
  • Staking cryptocurrency

Tax-free crypto transactions

Not sure whether your transactions will be subject to tax? The following transactions are tax-free in Ireland.

  • Buying cryptocurrency with fiat currency
  • Holding cryptocurrency
  • Moving cryptocurrency between wallets you own
  • Taking out a cryptocurrency loan

How much is cryptocurrency taxed?

In Ireland, capital gains are subject to a standard tax of 33%. Your first €1,270 of capital gains are tax-exempt.

If you earn crypto income (like earning crypto from a job), you’ll pay taxes based on your income tax rates.

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In addition, you will pay the Universal Social Charge (USC) on your gross income if it exceeds €13,000. Once income is over this limit, you pay a certain percentage on all income, which includes the income from your job as well as any gains you’ve made from cryptocurrency and other assets.

How can you avoid cryptocurrency taxes?

There is no way to legally avoid cryptocurrency taxes. However, there are simple strategies that can help you legally reduce your cryptocurrency tax burden.

  • Hold your cryptocurrency: There is no tax for simply holding cryptocurrency. If you do not dispose of your coins, you will not be subject to capital gains tax.
  • Take advantage of capital losses: Remember, losses can offset any gains that you have during the tax year. Any additional losses can be carried forward into future tax years (more on this later).
  • Borrow against crypto assets: Instead of disposing of your crypto, consider taking out a loan using your crypto-assets as collateral. Doing this does not trigger a taxable event.

Can the government track your crypto-assets?

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Cryptocurrency 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 transactions on blockchains like Bitcoin and Ethereum are publicly visible. Tax agencies around the world use data matching to track transactions and identify ‘anonymous’ wallets.

Am I trading cryptocurrency as a business?

If you’re trading cryptocurrency as a business, all profits will be subject to capital gains tax rather than income tax.

There are various factors that may be used to determine whether your cryptocurrency activity reaches the level of a business known as the ‘Badges of Trade’. This includes:

  • Volume and frequency of transactions
  • Level of organisation
  • Your reason for making the transactions

It’s likely that most Irish crypto investors won’t reach the level of sophistication required to be considered a ‘business’.

What accounting method should I use for cryptocurrency?

When you dispose of your cryptocurrency, you can calculate your capital gains through the FIFO (First-In First-Out) method. This essentially means that the first cryptocurrency that you acquired is also the first that you dispose of.

Here’s an example of how this works.

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One exception to this rule is in the case where you dispose of your crypto within 4 weeks of acquiring it. In this case, the crypto you disposed of is the crypto you most recently acquired.

Due to the complexity that can arise when making these calculations, many investors opt to use crypto tax software to automate all of their crypto tax calculations.

What is the deadline for filing your crypto taxes?

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In Ireland, the tax year runs from January 1 - December 31.

The deadline for filing your cryptocurrency taxes is October 31.

If you made gains on cryptocurrency from January 1 - November 30, you’ll need to pay taxes due by December 15.

If you made gains on cryptocurrency in the month of December, your deadline to pay taxes is January 31.

Chapter 2

The taxability of different transaction types

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How is buying cryptocurrency taxed?

Buying cryptocurrency with fiat like EUR is not considered a taxable event. However, you should keep records of these transactions so that you can easily calculate your capital gains and losses in the case of a future disposal.

How is selling cryptocurrency taxed?

Selling cryptocurrency is considered a taxable disposal. You’ll incur a capital gain or loss depending on how the price of your coins has changed since you originally received them.

How are crypto-to-crypto trades taxed?

Trading one cryptocurrency for another is considered a taxable event. You’ll incur a capital gain or loss depending on how the price of the crypto you’re trading away has changed since you originally received it.

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How is paying for goods and services with crypto taxed?

Paying for goods and services with cryptocurrency is considered a taxable disposal. You’ll incur a capital gain or loss depending on how the value of your crypto has changed since you originally received it.

In addition, you’ll pay the 23% Value Added Tax (VAT) when you buy goods and services with crypto.

How are cryptocurrency fees taxed?

Typically, fees associated with acquiring and disposing of your cryptocurrency are considered allowable expenses that can reduce your capital gain.

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How are cryptocurrency losses taxed?

If you dispose of cryptocurrency at a lower cost than you originally received it, this is considered an ‘allowable loss’. Allowable losses can be used to offset any capital gains you have during the same tax year.

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If you have more losses than gains during the tax year, you can roll forward your losses to offset future capital gains. Alternatively, you can make a request to transfer your losses to your spouse or civil partner.

How is getting paid in cryptocurrency taxed?

If you get paid in cryptocurrency in compensation for labour, you will recognize income based on the fair market value of your coins at the time of receipt.

How is cryptocurrency mining taxed?

Profits from cryptocurrency mining are likely subject to income/corporation tax at the time of receipt for both businesses and individuals. If you sell your mined coins at a later date, you will likely incur a capital gain or loss depending on how the value of your crypto has changed since you originally received it.

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How is cryptocurrency staking taxed?

At this time, there is no guidance available on how staking is taxed. It’s likely that staking rewards will be considered income at the time of receipt. Like mined coins, you will incur a capital gain or loss upon disposal based on how the value of your crypto has changed since you originally received it.

How are airdrops taxed?

It’s likely that tokens that you receive from airdrops will be considered income based on their fair market value at the time of receipt. If you dispose of them in the future, you’ll incur a capital gain or loss depending on how the value has changed since you originally received them.

How are NFTs taxed?

At this time, Revenue Ireland has not provided any guidance on how NFTs are taxed. It’s likely that they will be taxed similarly to cryptocurrencies and be subject to capital gains tax upon disposal.

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In addition, buying NFTs with cryptocurrency is considered a taxable event. In this case, you are disposing of your cryptocurrency, and you’ll incur a capital gain or loss depending on how its price has changed since you originally received it.

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On the other hand, buying NFTs with fiat currency is not considered taxable.

In the event that you create and sell your own NFTs, you’ll likely recognize income based on revenue from primary and secondary sales.

How is DeFi taxed?

At this time, Revenue Ireland has not provided guidance on how DeFi transactions are taxed. In general, it’s likely that DeFi transactions will be taxed similarly to other types of crypto transactions. That means:

  1. Earning cryptocurrency will be subject to income tax
  2. Crypto-to-crypto swaps and other disposals will be subject to capital gains tax

How are stablecoin trades taxed?

Despite the fact that stablecoins are designed to mimic the price of fiat currencies, they are taxed the same as other cryptocurrencies. When you dispose of a stablecoin, you’ll incur a capital gain or a loss (though it’s likely that this will be close to 0).

How are cryptocurrency gifts taxed?

Gifting a cryptocurrency is considered a taxable disposal. You’ll incur a capital gain or loss depending on how the price of your coins has changed since you originally received it.

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If you inherit or receive a cryptocurrency gift, you’ll be required to pay capital acquisitions tax of 33% based on the fair market value of your crypto at the time of receipt.

How are cryptocurrency rebrandings taxed?

A cryptocurrency rebranding takes place when a coin or blockchain changes its name, but does not issue new coins or make changes to the underlying technology. One example is the Matic Network changing its name to Polygon in February 2021.

If you are holding a cryptocurrency that has rebranded, you will not incur any tax liability.

Chapter 3

How to report your cryptocurrency taxes

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How do I report my cryptocurrency taxes?

To report your cryptocurrency taxes, you can use Revenue Online Service (ROS) or MyAccount.

If you are a Pay As You Earn (PAYE) worker, you should report your capital gains from cryptocurrencies and other assets on Form CG1 or Form 12.

If you are Self Employed or a Chargeable Person (more than €5,000 in assessable non-PAYE income or more than €30,000 in total gross non-PAYE income), you should report your capital gains on Form 11.

How do I keep track of my cryptocurrency transactions?

To ensure that you’re accurately reporting your taxes, it’s recommended that you keep detailed records of your cryptocurrency transactions. You should keep the following information for at least 5 years:

  • Type of cryptocurrency
  • The original cost of acquiring the cryptocurrency
  • The date you originally acquired the cryptocurrency
  • Your proceeds from disposing of the cryptocurrency
  • The date you disposed of the cryptocurrency
  • Your reason for making the cryptocurrency transaction
  • The other party involved in the transaction (even if it’s just their wallet address)!

Trying to track this information on your own can be difficult, especially if you’ve transferred your cryptocurrency across different wallets and exchanges.

Many investors use crypto tax software to integrate their wallets and exchanges and easily track their cryptocurrency gains, losses, and income across their portfolios. Crypto tax software can save you hours of time and effort.

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