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  The Irish Revenue Commissioners have produced a guidance manual on the taxation of cryptocurrencies and anyone holding, trading or accepting cryptocurrencies should take note, as should their tax advisors. The purpose of the manual is to give guidance on the tax treatment of various transactions involving cryptocurrencies and to remove much of the uncertainty surrounding how cryptocurrencies are treated from a taxation perspective. As with any other economic activity, the treatment of cryptocurrency related income received or charges made will depend on the particular activities and the parties involved. Tax advisors must continue to apply the relevant legislation and case law to determine the correct tax treatment. Each case will still be considered on the basis of its own individual facts and circumstances. Importantly for the growing number of businesses which accept payment for goods or services in cryptocurrencies, there is no change to when revenue is recognised or how taxable profits are calculated. Where there is an underlying tax event on a transaction involving the use of a cryptocurrency there is a requirement in the tax code for a record to be kept of that transaction which will include any record in relation to the cryptocurrency. Therefore, no special tax rules for cryptocurrency transactions are required. The manual goes on to explain how cryptocurrencies will be assessed for income tax, CGT, PAYE, and Corporation tax. Interestingly the...

The Irish Revenue has issued an eBrief to clarify how “normal tax rules” apply to transactions involving cryptocurrencies. The eBrief, published on the Revenue’s website on May 15, states that the treatment of income received from and charges made in connection with activities involving cryptocurrencies will depend on the activities and the parties involved. Therefore, the relevant legislation and case law must be applied to determine the correct tax treatment. The brief stressed that each case must be considered on the basis of its own individual facts and circumstances. For businesses that accept payment for goods or services in cryptocurrencies there is no change to when revenue is recognized or how taxable profits are calculated. Businesses are required to maintain records of any transactions in relation to cryptocurrency where there is an underlying tax event. As such, no special tax rules for cryptocurrency transactions are required, the eBrief states. The eBrief sets out the treatment of cryptocurrency transactions under income tax, corporation tax, capital gains tax, value-added tax, and pay-as-you-earn (PAYE) wage withholding as follows: For income tax purposes, profits and losses of a non-incorporated business on cryptocurrency transactions must be reflected in the business’s accounts and will be taxable on normal income tax rules; For corporation tax purposes, profits and losses of a company entering into transactions involving cryptocurrency should also be reflected in accounts and will be...

The highly concentrated nature of Ireland’s corporation tax receipts represents “an unacceptable level of risk,” according to parliament’s Public Accounts Committee. The PAC has published a new report on Ireland’s corporation tax receipts. Corporation tax accounted for 15 percent of total tax receipts in 2016, with 70 percent of all corporation tax paid by the top-100 companies and 37 percent paid by just 10 companies. The Committee set out to examine the risk posed by this high concentration of receipts and how best to resolve such. According to the Committee, “The highly concentrated nature of corporation tax receipts represents an unacceptable level of risk to the sustainability of the corporation tax regime and to overall exchequer income.” The Committee found that, in 2015, the average effective corporate tax rate applying to all companies was 9.8 percent. However, it also calculated that 13 of the 100 companies with the highest taxable income had an effective rate of less than one percent, a figure it said reflected the use of tax credits and reliefs, and in particular of double taxation relief and research and development tax credits. The PAC recommended that the Finance Department conduct a review of the corporate tax system and publish proposals for dealing with the high concentration of receipts. It also argued that the Government should carry out a detailed analysis of double taxation relief, which reduced...

Successive Maltese governments have sought to conclude double tax treaties with important trading partners as well as with emerging countries, in order to encourage the growth of international trade including that of financial services. To date, treaties are in force with over 70 countries and this policy is expected to continue in the future. Most of Malta’s double tax treaties are based on the OECD model. Once concluded, a tax treaty becomes law by Ministerial order and overrides any provisions to the contrary under Maltese domestic tax legislation. Double taxation relief is available in the terms of the relative tax treaty. For more information on Malta’s double tax treaties see below. The following is an updated list of all Malta Double Tax Treaties.   Belgium Supplementary Agreement Malta – Belgium : Signed on 23 June 1993 Bulgaria Double Tax Treaty Malta – Bulgaria : Signed on 23 July 1986 Canada Double Tax Treaty Malta – Canada : Signed on 25 July 1986 China Double Tax Treaty Malta – China : Signed on 2 February 1993 China Order 2011 : Signed in October 2010 Croatia Double Tax Treaty Malta – Croatia : Signed on 21 October 1998 Cyprus Double Tax Treaty Malta – Cyprus : Signed on 22 October 1993 Czech Republic Double Tax Treaty Malta – Czech Republic : Signed on 21 June 1996 Denmark Double Tax Treaty Malta – Denmark : Signed on...

On the 22nd May 2018, the Government of Malta published LN 162 of 2018, a new Legal Notice entitled ‘Value Added Tax (Regulation as a Single Taxable Person) Regulations, 2018.  This LN will allow separate persons, which are connected together by specific criteria to be grouped together as a single taxable person for VAT purposes.  These regulations came into force on 1st June 2018.  VAT grouping is for now limited to persons which are operating in the financial services and gaming industries.  It is hoped that vat grouping will provide an opportunity for tax optimization to persons engaged in the gaming and financial services industries. Two or more legal persons established in Malta will be allowed to register as a single taxable person under the VAT Grouping mechanism provided the following conditions are satisfied:  at least one of the applicants must be a taxable person licensed or recognized by the MFSA or the MGA as prescribed;  each of the applicants must be bound to each of the other by financial links, organizational links and economic links: A financial link is deemed to exist where the same legal/physical persons, hold directly or indirectly more than 90% of at least two of the following: – voting rights or equivalent interests; – entitlement to profits available for distribution; or – entitlement to surplus assets available for distribution on a winding up or equivalent event. An organizational...