The Irish revenue service has published a manual with guidelines aimed at eliminating the uncertainty surrounding the taxation of crypto transactions. Investors and traders of digital coins, businesses working with cryptocurrency and tax advisors, of course, can now find answers to many but not all of their questions. The notice has been issued at a time when tax authorities across Europe are trying to tap into crypto incomes and profits in the absence of dedicated regulations in most cases.
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Cryptos to Be Treated Under ‘Normal’ Tax Rules
The “Tax and Duty Manual” issued by authorities in Ireland attempts to clarify matters related to crypto taxation and mostly confirms that the existing regulations apply to the crypto sector. The document provides guidelines on the tax treatment of various transactions involving cryptocurrencies. The Irish Revenue Commissioners, the government agency responsible for customs and taxation, emphasizes that the advisory published this month is to be used as a reference for tax purposes only, as it does not cover regulatory and other aspects.
According to the instructions, direct taxes such as corporation tax, income tax and capital gains tax are applicable but each case should be reviewed separately, according to the individual facts and circumstances. In general, businesses accepting crypto payments for goods or services should keep records of crypto transactions. No special rules have been introduced so far and taxable profits should be calculated according to the current tax legislation.
The profits and losses of a company transacting in cryptocurrency must be reflected in accounts and are taxable under “normal CT rules,” the document states. Ireland’s Taxes Consolidation Act from 1997 recognizes that some businesses operate and prepare their accounts in a “functional currency” other than euro. The authors of the point out, however, that cryptocurrencies cannot be considered functional currencies as defined in Section 402(1) of the TCA. Therefore, accounts for tax purposes cannot be maintained in crypto. Instead, euro or other fiat currency should be used.
Irish tax officials have explained crypto income taxation, as well. “Profits and losses of a non-incorporated business on cryptocurrency transactions must be reflected in their accounts and will be taxable on normal income tax rules,” the notice reads. They have also informed taxpayers that gains and losses incurred on cryptocurrencies are chargeable or allowable for capital gains tax if they accrue to an individual, or for corporate tax on chargeable gains for companies.
bitcoin Is Currency as Far as VAT is Concerned
In the absence of common European guidelines on how to treat cryptocurrencies for tax purposes, many member-states have to base their VAT (Value Added Tax) policies on a ruling by the Court of Justice of the EU from 2015. The Luxembourg-based institution has drawn a parallel between “virtual currencies” and fiat money, when they are used for payments. The Republic of Ireland is now joining these countries confirming that bitcoin constitutes a currency for VAT purposes.
In result, cryptocurrencies like bitcoin are regarded as “negotiable instruments” and exempt from VAT in accordance with the Irish VAT Consolidation Act of 2010. The manual notes this applies to companies buying and selling cryptocurrencies and acting as owners of crypto holdings. On the other hand, value added tax is due from suppliers of goods or services sold for cryptocurrencies. The taxable amount, however, should again be calculated in euro and at the time of the supply.
The Irish Revenue Commissioners point out that the value of bitcoin and other cryptos may vary between trading platforms. In the absence of a single exchange rate, a “reasonable effort should be made to use an appropriate valuation for the transaction in question,” the manual says, without detailing what “reasonable” and “appropriate” may mean in practice.
Income received from mining operations will generally be outside the scope of the value added tax. Crypto mining is not considered an for VAT purposes yet. It’s worth noting that no instructions have been given on the taxation of incomes, profits and other flows related to initial coin offerings. The document issued by the Irish revenue service does not say anything about digital tokens and token sales.
Do you think the Irish tax manual provides enough clarity in regards to crypto taxation? Share your opinions in the comments section below.
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In a market flooded with fintech projects and startups, comes forward to offer crypto-enthusiasts the opportunity to invest in a way they never thought was possible by now.
What is Countinghouse?
is a foreign exchange (forex) direct hedge fund which has been created by using coded algorithms and mathematical techniques to generate earnings from the volatility in the crypto market and increase the ROI (return of investment) for users.
Their firm has been established for a few years now, and, in this period, they have obtained 70–120% profit per annum for their clients.
Unlike traditional investment funds, supports cryptocurrencies and uses blockchain technology not only to offer more financial freedom to users, but also to increase the level of management and control they have on these investments.
Last year, they started testing their algorithms and techniques in cryptocurrency markets and discovered that these strategies were extremely efficient, raking in approximately 600% in 12 months of trading. Now, after a year of testing, they have made available their crypto-trading through their ICO, giving a member of the public the opportunity to take part in their activities whereas before it was available only to professional investors.
What is Countinghouse’s Goal?
The platform’s objective is to maximize the investor’s earnings through mathematical risk management and applying trading algorithms to the cryptocurrency market.
It forms part of a trading strategy where profit is forced out of volatility instead of trying to profit from price predictions. In layman’s terms, while not guaranteed, investors in the platform can expect to make money from volatility in both bear and bull markets. This will turn cryptos from a risky investment into a profitable opportunity, and will further help legitimize the blockchain as a feasible investment and currency alternative.
Countinghouse Investing Advantages
There are some notable advantages to investing in Countinghouse’s fund. These include:
Decades of experience in trading
According to the information available online, the parent company that created this project has been active in the foreign exchange market for more than ten years.
This means that this project does not need to use the ICO funds for starting up or putting together a product like many other projects, meaning they can allocate more than 90% of the ICO earnings directly into their fund.
Advanced usability
Along with offering users manual investment prospects, this fund can also be set to work, and automatically to permit more financial flexibility.
Transparency
All of the invested capital is relocated directly to one’s native account via the use of a reputable business structure that has formerly been verified on functional products.
Profitable returns
The governance system for Countinghouse uses proprietary algorithmic trading models that have been used before with great success with fiat currencies. The states that the same models have also been applied for cryptocurrencies, and the ROI that resulted from the 12-month period was quite substantial.
Accessible to all
While hedge funds commonly require a large investment sum (normally $1 million minimum) to join, here, all users can take part in this fund for as little as a couple of dollars, making it much more accessible for more types of investors and traders. To give you an idea, traditionally it would cost a minimum of $300,000 to invest in a fund such as the Countinghouse Fund.
Kindly note that in terms of investors from the USA and Singapore, only professional investors are allowed to participate. This is due to strict regulations in the relevant countries when it comes to something that is deemed the holding of securities. If you fall in this category and wish to participate, you will have to formally declare your status by completing a professional investor declaration before committing any capital to the fund.
It should also be noted – that despite the bearer-holdings structure of the fund – identification and verification in the form of KYC (Know Your Customer) are required of all participating investors.
Financial flexibility
Funds can be liquidated instantly and easily by just trading tokens, and there are no long waits such as those that come with more traditional investments.
Reduced risk
To reduce the risk for its investors, they use advanced mathematical techniques to minimize the negative effects and the impact of sharp market movements.
The Team
The team has decades of combined experience and flexibility for its traders. The team’s members mitigate risks through mathematical and trading algorithms which have been developed in response to the volatile market circumstances on the foreign exchange, the same codes and algorithms which have now been implemented into the crypto-currency exchange.
Tim Dawson (above) is the director of the quantitative analysis of Countinghouse. He comes from a computer learning, mathematics, and programming background.
Mike Pomery (above) is the Director of Operations of the launched fund, and is also a published author, an experienced trader, and statistics professional and researcher.
The whitepaper also features seven other members, having backgrounds and seniority that range from investment banking, marketing advising, management, internet security, blockchain, and communication.
The Differences Between Countinghouse and Traditional Hedge Funds
The differences between traditional hedge funds and crypto hedge funds come from the very nature of the currencies used. Cryptocurrencies are decentralized money that is not governed by any central authority. However, they also experience great volatility and often have strict regulations imposed (depending on the country’s jurisdiction), thus generating fear and uncertainty from time to time, which generally lead to huge price drops and steer away from mainstream adoption.
Instead, fiat money is accepted everywhere, can be easily tracked, and is completely regulated. Its volatility is moderated and, because of this, they are less of an investment risk when used in common hedge funds.
However, riskier crypto-hedge funds such as Countinghouse bring a higher return of investment. Countinghouse Fund was able to profit from a +600% return on an initial crypto-investment that was made back in September 2017 (see the graph above).
Also, there are no call options for crypto-hedge funds. The return is paid in tokens (CHT tokens in our case) as compared to traditional hedge funds where you receive the returns in the hedged asset.
ICO Details
The company will be using its native token called CHT to enable internal hedge related transactions. These tokens are available for purchase in the which will end on the 12th of June 2018.
The ICO’s purpose is to raise funds that will be used to create an independent fund that hedges just the risk of cryptocurrency assets by using proprietary algorithms and investment strategies.
From these earnings, they will allocate 60% of them to algorithmic trading. 30% of their fund will go to their double-sided arbitrage method improved for crypto-currency, and the last 10% of the fund will be used for crypto-debentures (loans) and ICO investments.
Milestones and Road Map
The project’s future milestones are scheduled to start after the ICO ends. Investor capital will be deployed the day after the token sale event comes to an end (on June 13th, 2018). This is possible due to the fact that Countinghouse Fund is an established business.
Final Verdict
has a solid project and a very experienced and qualified team, proving that their investment techniques have been very fruitful. The great use case and profitability rate should make this ICO a favorite among crypto-enthusiasts and investors alike.
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