Ireland - Cyptocurrency VAT Treatment

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The Irish Revenue has issued an eBrief to clarify how "normal tax rules" apply to transactions involving cryptocurrencies. For VAT purposes, the Revenue, taking into account a European Court of Justice ruling, regards Bitcoin and similar cryptocurrencies as "negotiable instruments" and therefore exempt from VAT.

Financial services consisting of the exchange of bitcoins for traditional currency are VAT-exempt where the company performing the exchange acts as principal (i.e. buys and sells cryptocurrencies acting as the owner of the virtual currency).

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 cryptocurrency 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.

Should you require any VAT assistance in Ireland, or require any international VAT assistance, please contact us.

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