Law Library Stacks

Back to Index of Taxation of Cryptocurrency Block Rewards

Ireland has yet to implement a regulatory regime for cryptoassets and has instead adopted a wait-and-see approach. There is no taxation legislation or rules that apply specifically to cryptocurrencies, and the current tax structure, such as the income tax, corporation tax, and capital gains tax, applies to cryptocurrencies and assets. The particular tax that applies depends upon the activities for which the assets are used.

I. Introduction

The Irish government is taking steps to make Ireland a global leader in financial services[1] and “to demonstrate its support of the development and adoption of new technologies, including blockchain, as a way to encourage digitalisation and foster innovation.”[2] Ireland has yet to implement a regulatory regime for cryptoassets, instead opting for a wait-and-see approach.[3]  

In 2018, the Department of Finance issued a discussion paper on virtual assets.[4] One of the key considerations it noted was the need for a “clear legal & regulatory environment to ensure compliance when investing in blockchain linked businesses [and] Guidance in relation to tax and consumer protection matters.”[5]

The government introduced an Intra-Departmental Working Group to identify the risks and economic opportunities for Ireland, monitor developments into virtual currencies, and consider whether policy recommendations are required.[6]

Back to Top

II. Tax Treatment of Block Rewards

There is no taxation legislation or rules in Ireland that apply specifically to cryptocurrencies.[7] The current tax structure, such as the income tax, corporation tax and capital gains tax, applies to cryptocurrencies and cryptoassets, with the particular tax depending upon the activities the assets are used for and the nature of the taxpayer.[8] Thus, any profits and losses of cryptocurrency transactions are accounted for using the income tax or corporation tax rule that must be determined on the individual facts of the case.[9] The corporation tax does not allow companies to prepare their accounts in cryptocurrencies, thus functional currencies must be used when preparing accounts.[10]

Any profits are subject to the capital gains tax for an individual or the corporation tax for a company, and losses may be written off.[11] The Office of Revenue Commissioners’ Tax and Duty Manual notes that profits and losses on cryptoassets are chargeable or allowable for capital gains tax for individuals, or for corporation tax on chargeable gains if they accrue to a company.[12] The Manual also notes that “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.”[13]

The Tax and Duty Manual notes that, in spite of a judgment from the Court of Justice of the European Union that bitcoin constitutes a currency for the purposes of value added tax (VAT), cryptocurrencies are considered to be negotiable instruments for the purses of VAT and are thus exempt, in most circumstances, from this tax.[14] The exemption from VAT also applies to financial services that exchange bitcoins for fiat currency, provided the company that performs the exchange buys and sells cryptocurrencies as the owner.[15] Any goods sold, or services performed, in exchange for cryptocurrency are chargeable for the purposes of VAT.[16] The taxable amount is calculated from the value of the cryptocurrency at the time of the transaction.[17] As the value of cryptocurrencies can vary across different exchanges, “[a] reasonable effort should be made to use an appropriate valuation for the transaction in question.”[18]

A. Mining

There are no taxation laws or rules that specifically apply to the mining of cryptoassets in Ireland. If virtual currencies are mined, any virtual assets acquired as a result of mining may be subject to capital gains tax.[19] The only guidance from the Office of the Revenue Commissioners on mining,  contained in the Tax and Duty Manual, notes that any income received from mining is typically “outside the scope of VAT on the basis that the activity does not constitute an economic activity for VAT purposes.”[20]

B. Airdrops, Staking, Forging, and Forks

There appear to be ­no specific tax laws or policies in Ireland on airdrops of cryptoassets. Tax may be chargeable depending upon the circumstances of the airdrop. There also appear to be no specific tax laws or policies that apply to staking or forging for proof of stake cryptocurrencies, or to forks in blockchains.

Back to Top

Prepared by Clare Feikert-Ahalt
Senior Foreign Legal Specialist
January 2021


[1] Government of Ireland, Ireland for Finance 62 (Apr. 2019), https://perma.cc/HKL6-Z8TH.

[2] Global Legal Assets, Blockchain & Cryptocurrency Regulation 2021: Ireland, https://perma.cc/5KGX-RQTX.

[3] Id.

[4] Department of Finance, Discussion Paper: Virtual Currencies and Blockchain Technologies (Mar. 2018), https://perma.cc/RH92-5WGG.

[5] Id. table 2.3.      

[6] Virtual Currencies and Blockchain Technology, Department of Finance, https://perma.cc/QB6Q-WASN

[7] Cryptocurrencies, Office of the Revenue Commissioners, https://perma.cc/5YAQ-J5R7.

[8] Office of the Revenue Commissioners, Tax and Duty Manual: Taxation of Cryptocurrency Transactions ¶ 1 (last reviewed Apr. 2020), https://perma.cc/VD5P-ZM77.

[9] Id. ¶¶ 1.1 - 1.2.

[10] Taxes Consolidation Act 1997, No. 39/1997 § 402(1), https://perma.cc/9EPF-BGTR. See also Office of the Revenue Commissioners, Tax and Duty Manual: Taxation of Cryptocurrency Transactions, supra note 8,¶ 1.2.

[11] Department of Finance, Discussion Paper: Virtual Currencies and Blockchain Technologies, supra note 4, table 2.3. 

[12] Office of the Revenue Commissioners, Tax and Duty Manual: Taxation of Cryptocurrency Transactions, supra note 8, ¶ 1.3.

[13] Id. ¶ 1.1.

[14] Case C-264114, Skatteverket v. David Hedqvist, ECLI:EU:C:2015:718, https://perma.cc/2YN7-6AVU. See also VAT Consolidation Act 2010, ¶ 6(1)(c), https://perma.cc/VX2M-CLHP; Office of the Revenue Commissioners, Tax and Duty Manual: Taxation of Cryptocurrency Transactions, supra note 8, ¶ 2.

[15] VAT Consolidation Act 2010, sched. 1, ¶ 6(1)(d). See also Office of the Revenue Commissioners, Tax and Duty Manual, Taxation of Cryptocurrency Transactions, supra note 8, ¶ 2.1.

[16] VAT Consolidation Act 2010, sched. 1, 6(1)(d). See also Office of the Revenue Commissioners, Tax and Duty Manual: Taxation of Cryptocurrency Transactions, supra note 8,¶ 2.2.

[17] Office of the Revenue Commissioners, Tax and Duty Manual, Taxation of Cryptocurrency Transactions, supra note 8,¶ 2.2.

[18] Id. ¶ 4.

[19] Department of Finance, Discussion Paper: Virtual Currencies and Blockchain Technologies, supra note 4, ¶ 5.5.

[20] Office of the Revenue Commissioners, Tax and Duty Manual, Taxation of Cryptocurrency Transactions, supra note 8, ¶ 2.3.

Back to Top

Last Updated: 02/05/2021