• Sign in
  • ARTICLE - Ireland

    Crypto tax Ireland – Buying and selling crypto

    17 May

    Introduction - crypto tax Ireland

    Like most jurisdictions around the world, there are no specific tax rules that apply to the buying and selling crypto assets in Ireland.

    Therefore, like those other jurisdictions, the tax position on the sale of crypto assets will be subject to general Irish tax law principles. 

    In addition, the Irish Revenue has also issued guidance in some particular areas.

    This article will mainly discuss cryptocurrencies – such as bitcoin, Ethereum and Dogecoin. The position for non-fungible tokens (“NFTS”) and other digital assets might differ.

    Buying cryptocurrency

    As one might surmise, the purchase of cryptocurrency is unlikely to give rise to any direct tax implications. For instance, there is no stamp duty on crypto assets (as there might be on the purchase of shares, for instance). Further, it is unlikely there will be any VAT implications where we are looking at an investor or trader buying and selling crypto-assets.

    However, the purchase of the cryptocurrency will be relevant for determining the base cost of the crypto when the investor decides to sell the assets.

    Sale of crypto-assets by individuals

    General

    The Irish tax position will depend on the Irish residence position of our crypto-investor. Specifically, whether they are:

    • Resident for tax purposes in Ireland; or
    • They are not resident for tax purposes in Ireland

    Irish resident individuals selling cryptocurrency

    If an Irish resident individual sells such an asset at a gain then it will usually be subject to capital gains tax. This is currently 33%. 

    Where the disposal results in a loss, then this capital loss can generally be:

    • Used in the current year against other gains; or
    • Carried forward to future years

    The position is slightly different if the person is carrying on a ‘trade’ of dealing in crypto. Here, any profit on the sale of crypto would be subject to income tax. Marginal income tax rates of up to 55% - where one includes social charges – might therefore be payable. 

    It is worth noting that a trading classification is only likely in exceptional cases with the trading needing to be carried out in a deliberate and commercial fashion.

    Non-resident individual

    A non-Irish resident individual (who is also non-ordinarily resident) is liable to Irish CGT on gains arising in Ireland from the disposal of Irish ‘specified’ assets only (e.g. land and buildings in Ireland). As such, crypto gains should not be taxable.

    Sale of crypto-assets by Companies

    An Irish resident company that disposes of crypto at a gain will be subject to capital gains tax at 33%.  Similarly, losses will also be treated in the same way as set out above for individuals.

    Where such a company conducts a ‘trade’ of dealing in crypto, then it’s profits will generally be subject to corporation tax at 12.5%. 

    Again, the threshold at which activities might be considered a trade is a high one. However, it is generally thought that a company might satisfy this more easily than an individual.

    Mining cryptocurrencies

    General

    The Irish Revenue has not provided any guidance on the position when it comes to the mining of cryptocurrencies. 

    If they follow the UK tax authorities position on the same activity, then the treatment will depend on whether:

    • The person is conducting a trade of mining crypto; or
    • The person’s activities fall short of a trade

    Trade

    Here, the person will be taxable on the trading profits generated from the mining activities.  

    A company will pay tax at 12.5% but an individual will be subject to tax at their marginal rates.

    No trade

    Where the activities fall short of a trade, then the income received by the person will be treated as ‘miscellaneous’ income. 

    Miscellaneous income tends to qualify for fewer reliefs than trading income.

    A company will pay tax at 12.5% but an individual will be subject to tax at their marginal rates.

    If you have any queries about this article, crypto tax in Ireland or the matters discussed more generally, then please do not hesitate to get in touch.

    The content of this article is provided for educational and information purposes only. It is not intended, and should not be construed, as tax or legal advice. We recommend you seek formal tax and legal advice before taking, or refraining from, any action based on the contents of this article

    Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus ut semper risus. Fusce ac pharetra sem. Praesent vitae eros a quam fermentum dignissim.

    MR BLAKEFIELD. REGAL CAPITAL. FLORIDA.

    Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus ut semper risus. Fusce ac pharetra sem. Praesent vitae eros a quam fermentum dignissim.

    MR BLAKEFIELD. REGAL CAPITAL. FLORIDA.

    Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus ut semper risus. Fusce ac pharetra sem. Praesent vitae eros a quam fermentum dignissim.

    MR BLAKEFIELD. REGAL CAPITAL. FLORIDA.

    1/3

    Contact us

    If you’re having any problems with your membership, account, or just generally loving Tax Natives. Drop us a line here and we’ll get back to you.

    Contact

    We collect personal information when you enquire about our services. We will use this information to provide the services requested, maintain records and, if you agree below, to send you marketing information. We will not share your infromation for marketing purposes with any other companies. For more information explaining how we use your information please see our Privacy Policy(Required)
    This field is for validation purposes and should be left unchanged.