Crypto in Ireland is subject to Income Tax and Capital Gains Tax.
In some specific circumstances, Capital Acquisitions Tax may also apply to crypto.
Capital Gains Tax
In Ireland anytime you make a gain (profit) from disposing of an asset - including crypto, Capital Gain Tax is calculated.
Disposals of crypto include:
Selling crypto for Euros or another fiat currency.
Swapping or exchanging one crypto for another.
Spending crypto to buy goods and services.
Gifting crypto - excluding to your spouse or civil partner in most instances.
If you received compensation or an insurance payout for a crypto asset.
Capital Gain Taxation in Ireland is a flat tax of 33%, regardless of one's income.
Capital Gains Tax Allowance
For each fiscal year there is a threshold of €1,270 below which no taxes are due.
That amount can be reached by deducting losses from the gains.
This rule applies to both residents and non-residents.
Capital Loss
If you made a loss while disposing of your crypto, you can offset that amount in order to lower your Capital Gains Tax bill.
In case of no gains and only losses, you can carry them forward to offset future gains.
You may also transfer allowable losses to your spouse or civil partner to offset against their capital gains.
An exception to this rule is for assets acquired and disposed of within four weeks. Losses from these assets may not be offset against gains generally, unless those gains were made from an asset of the same kind also acquired and disposed of within four weeks.
Lost or Stolen crypto
In absence of a specific guidance, we consider the general rule for lost or destroyed assets.
In these cases, the asset may be considered eligible for a capital loss equal to its market value at that time.
If the assets have become of a negligible value, it may be possible to consider them as a capital loss equal to the market value, proving the asset cannot be disposed in any other way.
Income Tax
No specific guide on the matter has been released, however we assume the following types of transactions will be subject to Income Tax:
Getting paid in crypto
Mining rewards
Staking rewards
Airdrops of crypto
Potentially a variety of DeFi activities where you earn new coins or tokens
Creating and selling NFTs as an artist
The amount of Income Tax you'll pay on crypto will be either 20% or 40% depending on your total earnings for the year.
Calculation of Crypto Income
To calculate the value of your Crypto Income you simply need to identify the fair market value of the coins or tokens on the day and hour that you received them, converted to EUR.
Crypto to Crypto transactions
Crypto trading in Ireland is taxed. So if you're trading Bitcoin for Ether or any other cryptocurrency - you'll pay Capital Gains Tax.
Trading your asset is considered a disposal, same as selling or spending it.
Capital Gains Tax is calculated on the asset you sell in the trade.
The capital gain calculation is made using the cost base of the crypto disposed, subtracting it from the fair market value of the asset on the day you traded it for another one.
Stablecoins fall under this category as well.
Transfers management
Transfers of crypto between your own wallets are tax free but the transfer fees associated with these transactions might not be. Though Revenue has no specific guidance on this yet, there is the potential that transfer fees may be viewed as spending crypto and therefore a disposal.
DeFi and Liquidity Pools
DeFi protocols and Liquidity pools can function in different ways.
The tax treatment will vary depending on the way the protocol works.
In case of trading on a dex (decentralized exchange) like Uniswap, it's considered as a disposal of crypto and will fall under the capital gains tax.
In case of adding liquidity to a pool and receiving a liquidity pool token, it could be seen as a crypto to crypto transaction and therefore falling under the capital gains tax.
In case of earning rewards through a token accruing value (i.e. LP token), the gain is made the moment you remove your capital. This could be seen as a disposal and subject to capital gains tax.
In case of earning a new token, instead of an LP, it could be seen as an income and therefore falling under the Income Tax calculated on the fair market price of the token in EUR the day you received it.
NFTs
NFTs are treated exactly the same as any other crypto asset. The disposal of an NFT by selling, swapping, spending or gifting it, will be subject to Capital Gains Tax on any profit.
Mining and Staking
Mining rewards may be subject to Income Tax.
If you later sell, swap, spend or gift mined coins, Capital Gains Tax will apply too.
Staking rewards - whether received as a result of direct participation in a PoS mechanism or received as a result of third-party staking or staking through DeFi protocols - are likely subject to Income Tax.
Airdrops
Airdrops of crypto - whether that's through participation in an event or for undertaking a specific activity are also likely subject to Income Tax upon receipt. You'll need to identify the fair market value in EUR of any airdropped crypto on the day you receive it to calculate your income.
Gifts and Donations
Gifting crypto in Ireland is taxed. It's seen as a kind of disposal and therefore subject to Capital Gains Tax.
An exemption applies in case of asset transfers between spouses or civil partners (including divorced, separated or former civil partners).
This exemption does not apply in the following cases:
transferring trading stock of a business you carried
transferring an asset to a non-resident
transferring an asset in absence of a court order
Receiving a Gift or a Donation
Crypto gifted or donated are subject to Capital Acquisition Tax of 33%.
The crypto must be worth over €3,000 and not coming from a spouse or civil partner.
Purchasing goods or services in Crypto
Spending your crypto is subject to Capital Gains Tax because you're disposing of your asset.
Ireland Financial Year
The financial year in Ireland runs from the 1st of January to the 31st of December.
However for declaring your Capital Gains Tax there are two deadlines:
15th of December, for profit made during the period 1st of January/30th of November of the same year
31st of January of the following year, for profit made during the period 1st to 31st of December
The deadline for the Tax Return, where one declares all the gains/losses (including any crypto income) of the financial year is set for 31st of October.
Where to Report your Crypto
All taxable gains and income from crypto must be reported in the annual tax return by the 31st of October.
It can be done by using the Revenue Online Service (ROS).
Alternatively, there are two paper forms:
Form CG1 (Capital Gains Tax Return and Self-Assessment), for PAYE workers
Form 11 (Income Tax and Self-Assessment), for self-employed or chargeable persons (an individual with either: net assessable non-PAYE income of €5,000/year up, or total gross income of €30,000/year)