# Revenue Guide to the taxation of Cryptocurrencies



## Brendan Burgess (20 May 2018)

https://www.revenue.ie/en/tax-profe...ains-tax-corporation-tax/part-02/02-01-03.pdf.


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## MrEarl (22 May 2018)

> 4. Valuation of cryptocurrencies
> Many cryptocurrencies, such as Bitcoin, are traded on a number of exchanges. Unlike shares or commodities the value of the cryptocurrencies may vary between exchanges. Therefore, there is not always a single “exchange rate” for cryptocurrencies. A reasonable effort should be made to use an appropriate valuation for the transaction in question.



Good to see Revenue recognizing that point.

I expect Revenue would be satisfied in instances where you can evidence the Euro equivalent indicated on the exchange that you use (assuming it actually provides the Euro equivalent, and not just the USD equivalent as some exchanges do). 

There can be notable differences in the exchange rates on different exchanges, and while your initial thought might be to try to seek out arbitrage opportunities, transaction/transfer fees and time delays in moving currencies between some of the exchanges (due to the exchanges themselves, not the cryptocurrency or technology behind it) makes it too risky imho.


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## MrEarl (22 May 2018)

Hello,

As an aside to the above, I would be interested in reading about how everyone manages to maintain their records of crypto transactions, for tax purposes.

It's relatively straight forward for those who have just bought a couple of coins via Coinbase for example, or who have just bought a few currencies and decided to sit on them long term...

....but most people investing / trading in cryptos, probably have accounts on half a dozen exchanges, a few wallets etc.  IMHO, most of the exchanges provide fairly basic / poor resources when it comes to providing transaction histories / statements.  A simple option to download all transactions into an Excel document would be helpful, in the absence of formal "statements" from the exchanges, but most seem to provide little more than a screen showing historic transactions and sometimes, that's not easily printed / copied.


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## Ualtar (5 Feb 2021)

Did I get it right?
My interpretation of this document is that I pay fees when I convert cryptocurrencies into euros, deduct the amount that was invested, deduct 1,290 euros that is tax-free and pay 33% of the remaining amount.

*Did someone interpret it differently from mine?*


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## tecate (5 Feb 2021)

If you trade between cryptocurrencies, those trades are taxable events also.


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## HPSauce (11 Mar 2021)

tecate said:


> If you trade between cryptocurrencies, those trades are taxable events also.



I would have thought the same, does it specifically say that somewhere though?

If you were directly trading ETH to BTC or example, and there was no USD or EURO conversion applied, how are you supposed to be valuing the taxable gain in FIAT terms?


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## DazedInPontoon (11 Mar 2021)

by using the fiat value of each at the time of the trade


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## HPSauce (11 Mar 2021)

DazedInPontoon said:


> by using the fiat value of each at the time of the trade



That makes absolute sense but I'd love to see some concrete guidance on it. Do we know if that exists? 

There's a thought that you can trade and make gains by dipping in and out of things like ETC and BTC and instead of pulling them out in FIAT between trades you exchange them for a stable coin instead. If it doesn't get changed to FIAT then you're not recognizing profits and so there's no taxable gain. Theoretically then you could keep your profits in crypto forever and either pay for goods and services directly with it or load up a crypto-backed visa card and spend away without ever paying CGT...

I'd like to think they've considered this scenario though and it's not that easy to dodge CGT, which is why I was wondering about the relevant guidance/direction from revenue dealing with the scenario.


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## RedOnion (11 Mar 2021)

HPSauce said:


> There's a thought that you can trade and make gains by dipping in and out of things like ETC and BTC and instead of pulling them out in FIAT between trades you exchange them for a stable coin instead.


Where's that thought coming from? Because it's completely wrong.


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## HPSauce (11 Mar 2021)

RedOnion said:


> Where's that thought coming from? Because it's completely wrong.



It's not coming from anywhere with any credibility, just a theory I've heard that I don't agree with. Just looking for some backup for my own opinion that's all.


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## EmmDee (11 Mar 2021)

HPSauce said:


> It's not coming from anywhere with any credibility, just a theory I've heard that I don't agree with. Just looking for some backup for my own opinion that's all.



It's a theory in the same sense that the earth is flat is a theory.

If you have an asset which you liquidate it causes a taxable event. It's irrelevant whether you liquidate for cash or for another asset. There can be some debate what exact liquidation and reinvestment price is determined for the event. But in this case it's easy - there is a valuation back to EUR at the time of the event. So there is no real debate.

Think of it other terms - if I buy a property which increases in price and instead of selling it on the market, I swap it for another property - then that goes up in price... the theory says as long as I don't convert to cash I avoid any tax liability. They should ring up revenue and propose that... for a laugh


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## HPSauce (11 Mar 2021)

EmmDee said:


> It's a theory in the same sense that the earth is flat is a theory.
> 
> If you have an asset which you liquidate it causes a taxable event. It's irrelevant whether you liquidate for cash or for another asset. There can be some debate what exact liquidation and reinvestment price is determined for the event. But in this case it's easy - there is a valuation back to EUR at the time of the event. So there is no real debate.
> 
> Think of it other terms - if I buy a property which increases in price and instead of selling it on the market, I swap it for another property - then that goes up in price... the theory says as long as I don't convert to cash I avoid any tax liability. They should ring up revenue and propose that... for a laugh



I like the property analogy, a good way of explaining it in more traditional terms. I guess the attitude here should be just because Revenue don't specifically say you can't, don't automatically assume you can


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## ThatNewGuy (12 Mar 2021)

MrEarl said:


> Hello,
> 
> As an aside to the above, I would be interested in reading about how everyone manages to maintain their records of crypto transactions, for tax purposes.
> 
> ...


In the great spike of 2018 I looked at this and found a service you could upload Exchange transaction exports and it gave you an output. I cant remember what it was but if I get some time to go digging I'll post back here. I suspect in the last 3 years that type of service has greatly advanced also though

On the above guidance provided by Revenue, does it cover whether losses crystallised can be offset against future gains also?


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## DublinHead54 (12 Mar 2021)

EmmDee said:


> It's a theory in the same sense that the earth is flat is a theory.
> 
> If you have an asset which you liquidate it causes a taxable event. It's irrelevant whether you liquidate for cash or for another asset. There can be some debate what exact liquidation and reinvestment price is determined for the event. But in this case it's easy - there is a valuation back to EUR at the time of the event. So there is no real debate.
> 
> Think of it other terms - if I buy a property which increases in price and instead of selling it on the market, I swap it for another property - then that goes up in price... the theory says as long as I don't convert to cash I avoid any tax liability. They should ring up revenue and propose that... for a laugh



I believe back in 2016/17 particularly in the US when tax policy on crypto was unclear there was a belief that selling BTC for USDT, stable coins or other cryptocurrency was not a taxable event. I believe the wording was along the lines of 'Converting Crypto Currencies to FIAT(USD etc) is a taxable event'. 

This reflected the market at the time as it was only really in 2017 that stablecoins popped up and trading between different crypto assets took off. This 'loophole' was later clarified.


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## torblednam (12 Mar 2021)

HPSauce said:


> I like the property analogy, a good way of explaining it in more traditional terms. I guess the attitude here should be just because Revenue don't specifically say you can't, don't automatically assume you can


Revenue don't need to specifically say anything, the tax legislation is clear. CGT is charged on gains arising on disposals of assets. The receipt of fiat money doesn't come into it.


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