How Ireland taxes cryptocurrency and NFTs

A cryptocurrency is an asset for Irish tax purposes. It is not considered to be money or a currency. A gain on the sale of a cryptocurrency is a capital gain and taxable at 33 per cent. The Irish Revenue do not consider investment in cryptocurrency by individuals as being in the nature of a trade. The Irish Revenue circulated a Paper Titled “Taxation of cryptoassets transactions Part 02-01-03” (hereinafter Manual) which was last updated in June 2024. This paper deals with direct tax treatment of cryptoassets.

The question of whether dealing in cryptoassets is a trade subject to income tax or an investment subject to capital gains tax (CGT) depends on several factors and the individual circumstances. Whether an individual is engaged in a financial trade of buying and selling cryptoassets will ultimately be a question of fact. A trade in cryptoassets would be similar in nature to a trade in shares, securities, or other assets. The Revenue has published guidance on trading in shares, securities, or other assets drawn from existing case law. Where a non-incorporated business makes a trading profit or loss on crypto-asset transactions this must be reflected in their accounts and will be taxable in accordance with normal Income Tax rules.

Not specifically, it depends on the accounting standards adopted and the nature of the holding of the cryptocurrencies, whether held for investment or for resale.

The profits and losses of a company entering into transactions involving cryptoassets would be reflected in accounts and, where they arise from a trade, will be taxable under normal CT rules. Section 402(1) TCA 1997 defines a company’s functional currency and recognises that companies can prepare their accounts in a currency other than the Euro where that other currency is their functional currency. As most cryptocurrencies are not a functional currency as defined, accounts, for tax purposes, cannot be prepared in cryptocurrencies: Euro or functional currency accounts must be prepared.

Where the company is engaged in a trade that includes dealing in cryptocurrencies, then profits would be taxable at 12.5 per cent. Otherwise it would be a capital gain and liable to an effective tax rate of 33 per cent.

Yes.

The Revenue has not stipulated that there is a specific tax treatment for the mining of cryptocurrency. The receipt is unlikely to trigger a tax event. On a subsequent disposal there will be no base cost for the asset, so the tax will be captured on the sale. Income received from cryptocurrency mining activities will generally be outside the scope of VAT on the basis that the activity does not constitute an economic activity for VAT purposes.

Ireland has not yet specifically addressed the tax treatment of cryptocurrencies received by airdrop. When cryptocurrency is received by airdrop it is an acquisition of an asset and the basic principles of Irish Taxation will apply, making the transfer subject to CGT. However, when cryptocurrency is received by airdrop there is no document of transfer and therefore it would not be liable to stamp duty under the current legislative framework.

The Revenue have not yet addressed the tax treatment of cryptocurrencies received from staking. The receipt of cryptocurrencies from staking is like receiving a fee for making the stake. An individual or a corporate is likely to be taxed on the market value of the coins received.

The Revenue has not yet addressed the tax treatment of the lending of the cryptocurrencies and of the remuneration thereof. However, the remuneration is likely to be taxable as income.

The Revenue have not yet addressed the tax treatment of a hard fork. It is worth considering that where there is a hard fork, creating a new cryptocurrency, that will not amount to a disposal of itself and any allowable costs for the original cryptocurrency may be likely to be allocated between the original and new cryptocurrencies.

There is no specific treatment, it would be taxable at the market value of the coins at the time they are paid.

The Revenue makes the point that “receipt of cryptoassets by way of gifts or inheritance may need to be considered in relation to a liability to Capital Acquisitions Tax (CAT). The valuation of the crypto-asset received for CAT purposes is the Euro equivalent at the time of the gift or inheritance.”

Generally, any gift is taxable at 33 per cent subject to small exemptions. A reward in a game may not be taxable as generally wagers are tax exempt.

Where cryptoassets are provided to an employee or director free of charge, normal benefit-in-kind rules will apply.

No.

Generally there are no transfer taxes applicable to the acquisition of cryptocurrencies. The exchange of tokens is not likely to meet the definition of stock or marketable securities or even chargeable securities. However, if the acquisition involves any written instrument executed in Ireland, or any matter or thing done or to be done in Ireland, then that written instrument could be liable to stamp duty.

There is an obligation to return the acquisition of any asset that is within the charge of capital gains tax. Failing to return the acquisition of an asset could render you liable to penalties for making an incorrect tax return.

There are no specific tax reporting obligations for cryptocurrency. On this point the Revenue states that where the records are stored in a wallet or vault on a device such as a personal computer, mobile phone or similar device, they must be made available to the Revenue upon request. These records must be retained for a period of 6 years. These provisions apply to all taxpayers, including PAYE only taxpayers.

The EU Council has adopted a directive amending EU rules on administrative cooperation dealing with the reporting and automatic exchange of information in relation to transactions in crypto-assets (DAC8). DAC8 imposes new tax transparency rules for all service providers facilitating transactions in crypto-assets for customers resident in the EU. The rules, which will come into effect in 2026, will require all service providers, of whatever size and wherever located, to report on crypto-asset transactions carried out by clients residing in the EU.

The Court of Justice of the European Union (CJEU) held in the Hedqvist case (C-264/14) that Bitcoin constitutes a currency for VAT purposes. In Ireland, where the cryptocurrency provides the holder with an interest in an underlying asset such as property, stamp duty may be payable on an assignment in order to be accounted for in a manner similar to the underlying asset. Generally however cryptocurrencies are exempt from VAT.

Financial services consisting of the exchange of bitcoins for traditional currency are exempt pursuant to Paragraph 6(1)(d) of the VAT Consolidation Act 2010, where the company performing the exchange acts as principal (ie buys and sells cryptoassets acting as the owner of the virtual asset).
VAT is due in the normal way from suppliers of any goods or services sold in exchange for bitcoin or other similar cryptocurrencies. The taxable amount for VAT purposes will be the Euro value of the cryptocurrencies at the time of the supply.

Income received from cryptocurrency mining activities will generally be outside the scope of VAT on the basis that the activity does not constitute an economic activity for VAT purposes.

The Revenue has not yet spoken on the tax treatment of tokens or cryptoassets issued pursuant to an ICO. Where the ICO is a capital raising exercise, it may be that the crypto-asset is treated as an asset in respect of which the company has no obvious base cost. If so, the company may be treated as disposing of an existing asset which it has created and subjected to corporation tax on the full proceeds. Alternatively, the company may be treated in the same way as an issuer of shares - where the share is treated as created rather than disposed of by virtue of the issuance - so that no tax charge arises. If the company makes regular issues of cryptoassets, it may be arguable that it forms part of a trading activity so that the ICO proceeds are taxed as income in accordance with the accounts.

The issue is VAT exempt in Ireland. If the tokens are comparable to shares or securities their issue should fall outside the scope of VAT. If the tokens are a new cryptocurrency, their issue should also be exempt from VAT. However, if the tokens do not equate to shares, securities or currency, their issue will give rise to a supply for consideration and would likely be subject to VAT, unless the only right the tokens confer is a right to payment, in which case the supply should be exempt.

On the basis that the ICO may be taxable as a disposal of an asset, we understand that the issue could therefore potentially be liable to stamp duty. However, the Revenue has not provided any defined rules on this matter to date.

There is no specific tax treatment. NFTs are simply regarded as another form of cryptoasset for tax purposes and the tax treatment follows those of other cryptoassets. Usually, tokenisation of an asset would not create a tax charge.

There is no specific tax treatment. NFTs are simply regarded as another form of cryptoasset for tax purposes and the tax treatment follows those of other cryptoassets. Usually, tokenisation of an asset would not create a tax charge.

No.

No.

NFTs are simply regarded as another form of cryptoasset for tax purposes and the tax treatment follows those of other cryptoassets.

On one level, NFTs are simply regarded as another form of cryptoasset for tax purposes and the tax treatment follows those of other cryptoassets (see the previous question regarding transfer tax on cryptocurrencies). However, the Revenue has not spoken with clarity on this topic to date. Therefore the NFT may be viewed as an intangible, and in the case of acquisition for consideration therefore, the taxable treatment may depend on the nature of the underlying asset. The tax treatment here will depend wholly on whether the Revenue will choose to view the NFT as an indivisible unit in terms of taxation, or whether, in the alternative, the Revenue will view the NFT as divisible between the intangible token and any tangible nature of the underlying assets.

NFTs are simply regarded as another form of cryptoasset for tax purposes and the tax treatment follows those of other cryptoassets (see the previous question on declaring cryptocurrencies).

NFTs are simply regarded as another form of cryptoasset for tax purposes and the tax treatment follows those of other cryptoassets (see the previous question on reporting cryptocurrency transactions).

On one level, NFTs are simply regarded as another form of cryptoasset for tax purposes and the tax treatment follows those of other cryptoassets. However, Revenue has not spoken with clarity on this topic to date. Therefore we think it is worth considering the fact that the NFT may be viewed as an intangible, and in the case of acquisition for consideration therefore, the taxable treatment may depend on the nature of the underlying asset. On the basis they are viewed as intangibles, NFTs would be treated as supplies of services for VAT purposes. It is likely that they will be treated as electronically supplied services so that the place of supply for VAT purposes is where the customer is located.