Most Irish resident individuals will be liable for Irish tax on disposals of assets abroad. If tax is also payable in the country where the property was situated and Ireland has a double taxation agreement with that country then a credit may be allowed against the Irish tax liability for any tax paid in the foreign country.
An important amendment applies from 1st January 2007 onwards which provides that capital gains tax paid in respect of disposals of property in Belgium, Cyprus, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Pakistan and Zambia will now be allowed as a credit against capital gains tax payable on the disposal in Ireland. Prior to this amendment capital gains tax payable in the countries listed was not allowed as a credit against Irish tax but was allowed as a deduction in calculating the Irish tax liability. This gave rise to a certain amount of double taxation.
The gain or loss must always be calculated in Euros. You do not calculate the gain/loss in the foreign currency and then convert to it to Euros. The original cost price of the property is converted to IR£/Euros based on exchange rates at date of purchase. The sale proceeds are also converted to Euros at the time of sale.