CRYPTO TAX IN IRELAND: A 2023 GUIDE
The growing trend of Irish citizens investing in cryptocurrency has not escaped the attention of Ireland’s Revenue Commissioners. In recent years, the cryptocurrency landscape has seen significant growth, with recent surveys indicating that up to 1 in 10 Irish investors currently hold cryptocurrency assets.
Consequently, the Irish government is now giving more scrutiny to digital assets than ever before. In this comprehensive guide, we will provide a detailed overview of the taxation of crypto-assets in Ireland, along with some practical tips and tools like CoinLedger that help you calculate your crypto taxes in minutes – Let’s get started.
Table of Contents
Is Cryptocurrency Taxed in Ireland?
Yes, cryptocurrency is subject to taxation in Ireland. The taxation of cryptocurrency in Ireland falls under the category of capital gains tax (CGT) or Income Tax. This means that any profits or gains made from the buying, selling, or exchanging of cryptocurrencies or your income from crypto currencies are generally liable to be taxed.
How Much is the Tax Do You Pay on Cryptos in Ireland?
The amount of tax you pay on cryptocurrency transactions in Ireland varies based on the specific type of transaction and your overall income level. Here’s a quick breakdown:
- Income Tax: If your cryptocurrency transactions are subject to Income Tax, you’ll pay either 20% or 40% based on your income tax band.
- Capital Gains Tax: Transactions like selling or disposing of cryptocurrencies are subject to a flat rate of 33% for Capital Gains Tax.
Read further for more information
What are Tax-Free Crypto Transactions in Ireland?
No, crypto is not tax-free in Ireland, but the following events are not taxable events in Ireland:
- Holding crypto
- Transferring crypto between wallets that you own
- Buying crypto with EUR or other fiat currencies
Crypto tax in Ireland is based on your profits and earnings, whereas you can buy, hold, and transfer crypto (to your own wallets) without paying taxes.
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How is Crypto Taxed in Ireland?
The Irish Revenue views crypto as a type of asset, and it is subject to capital gains tax, capital acquisition tax, corporation tax, and/or income tax depending on the nature of your specific crypto transactions.
Crypto Tax Ireland: Capital Gains Tax
When you sell or dispose of cryptocurrencies and realize a capital gain, you are generally subject to a standard capital gains tax rate of 33%. You can also deduct losses from your tax bill.
Example of capital gains in cryptocurrency
- Selling crypto for fiat
- Selling one crypto for another crypto
- Gifting crypto (this tends not to apply to gifts between spouses/civil partners)
- Compensation/insurance for a cryptocurrency asset
- Spending crypto on goods or services when the crypto price has increased at time of spending
However, there is an annual exemption for the first €1,270 of capital gains, which is tax-exempt.
Crypto Tax Ireland: Income Tax
If you earn cryptocurrency as part of your income (e.g., as payment for a job or services), or if you’re trading cryptocurrency as a business, it is subject to income tax based on your standard income tax rates.
The following types of crypto earnings are subject to Irish income tax.
- Receiving a salary in crypto from an employer
- Getting paid in crypto for goods or services as a contractor
- Rewards from mining or staking crypto
- Minting and selling NFTs
- Airdrops
- Income from DeFi applications
Your income tax rate will depend on your total income and tax status (sole trader vs. employee, for example), with examples shown in the table below.
Income Tax Rate Ireland
Ireland has two Income Tax rates. The rate you’ll pay depends on how much you earn and your individual circumstances – whether you’re single, married, have children and so forth.
| Tax Rate | Individuals with no dependent children | Individuals qualifying for Single Person Child Carer Credit | Married couples |
| 20% | €0 – €36,800 | €0 – €40,800 | €0 – €45,800 |
| 40% | €36,801+ | €40,801+ | €45,801+ |
Broadly speaking, you’ll typically pay either 20% or 40% taxes on crypto income depending on your total earnings for the year.
Crypto Tax Ireland: Capital Acquisition Tax
Also known as inheritance tax, CAT applies to gifts or inheritance you might have received, and this includes crypto. CAT is taxed at a flat rate of 33%. CAT does not apply to sums under 3000 EUR from a single person in one year, nor does it apply to gifts received from spouses or civil partners.
You can receive €335,000 in total inheritance from your parents (crypto or no crypto) over the course of your lifetime before any CAT is owed, and the lifetime threshold for family members other than parents is €32,500. You can receive a gift of €16,250 from non-family members before tax is owed.
Again, these sums refer to the total amount of gifts you can receive in your life before the threshold is reached, and any sums over those amounts will be subject to capital acquisition tax of 33%.
DeFi Taxes in Ireland
Given that the DeFi (Decentralized Finance) market is still relatively new, there is no specific tax guidance from Revenue. However, this doesn’t imply that you won’t have tax obligations related to your DeFi investments. Instead, you’ll need to analyze the existing guidelines and ascertain whether you’ve incurred a capital gain through a disposal or if it constitutes income.
Therefore, we strongly recommend seeking advice from a knowledgeable crypto accountant in Ireland if you hold DeFi investments.
That being said, by interpreting the current guidance, we can deduce some potential tax treatment, which ultimately hinges on the functioning of the specific DeFi protocol you’re involved with.
NFT Taxes In Ireland
Despite the unique nature of non-fungible tokens (NFTs), they are treated identically to other cryptocurrency assets from a tax perspective. This means that when you dispose of an NFT through actions such as selling, swapping, spending, or gifting, you are subject to Capital Gains Tax on any resulting profit.
On the other hand, if you are involved in creating and selling NFTs, such as an artist, you may be considered to have generated additional income, making you liable for Income Tax on those earnings. Currently, there is no specific guidance regarding whether the Artist’s Income Tax Exemption applies to NFTs. Therefore, we recommend that NFT creators consult with a knowledgeable tax advisor for personalized advice.
Crypto Tax Software in Ireland
You can use software like CoinLedger to help track your crypto transactions and pay taxes on your crypto. However, we also recommend consulting with a tax professional when paying crypto tax in Ireland, especially when dealing with DeFi which has no specific guidelines from Revenue at this time.
CoinLedger is user-friendly crypto tax software that simplifies transaction tracking and tax reporting. The software automates the entire crypto tax preparation process. Users can import their transaction data by syncing supported wallets or using the CoinLedger API to link with cryptocurrency exchanges.
When to Pay Crypto Taxes in Ireland?
In Ireland, The financial year spans from January 1st to December 31st, but for Capital Gains Tax, it involves two distinct periods.
If you’ve earned profits between January 1st to November 30th from cryptocurrency transactions, you’re required to settle the tax by December 15th of the same year.
For any gains made from cryptocurrency disposals between December 1st to December 31st, the tax must be paid by January 31st of the following year.
Additionally, the tax return, where you report all your cryptocurrency gains and income for the financial year, is due by October 31st of the subsequent year.
Can I avoid Crypto Taxes in Ireland?
Tax evasion is a serious offense with serious consequences. The penalties for tax evasion and avoidance in Ireland are severe – including potential fines of up to €126,970 and the possibility of a prison term lasting up to 5 years.
However, it’s worth noting that there are several lawful steps and strategies available to minimize your cryptocurrency tax liability legally.
Can the Irish government track my crypto activities?
Cryptocurrency exchanges that operate in Ireland must adhere to regulations by registering as Virtual Asset Service Providers (VASPs) with the Central Bank. VASPs have an obligation to conduct Customer Due Diligence (CDD) and furnish information to the Irish government when requested.
Furthermore, it’s crucial to bear in mind that transactions conducted on blockchain networks such as Bitcoin and Ethereum are publicly transparent. Tax authorities across the globe employ data analysis techniques to monitor transactions and uncover so-called ‘anonymous’ wallets.
How to Spend Crypto in Ireland?
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Crypto Tax Ireland FAQs
What is the Irish Tax Authority?
The Irish Tax Authority is officially known as the “Revenue Commissioners” or simply “Revenue” in Ireland. It is the government agency responsible for administering and enforcing tax and customs regulations in the country. The Revenue Commissioners collect various taxes, including income tax, value-added tax (VAT), capital gains tax (CGT), and other forms of taxation.
What are the taxation process for buying crypto in Ireland?
Buy crypto is tax free in Ireland. Acquiring cryptocurrency with fiat currency such as EUR is not deemed a taxable event. Nevertheless, it is advisable to maintain records of these transactions to facilitate the calculation of your capital gains and losses in the event of a future disposal.
What are the tax process for selling crypto in Ireland?
Selling cryptocurrency is regarded as a taxable transaction, resulting in either a capital gain or loss depending on the price fluctuation of your coins since their initial acquisition. Nevertheless, you are obligated to pay a fixed 33% tax on your capital gains when selling cryptos in Ireland.
What is the taxation process for using crypto to pay for goods and services in Ireland?
Using cryptocurrency to make purchases of goods and services is regarded as a taxable event, resulting in either a capital gain or loss based on the value fluctuations of your crypto since acquisition.
Additionally, a 23% Value Added Tax (VAT) applies when making purchases with cryptocurrency.
Furthermore, you can explore the Cryptowallet.com card as a convenient way to spend your cryptocurrencies directly from your crypto wallet
