Portugal Makes U-Turn On Crypto-Friendly Taxes
Though widely considered to be one of the most crypto-friendly countries, Portugal is increasingly shifting its position on taxing cryptoasset gains – and now plans to tax gains on crypto held for less than a year.
According to Bloomberg, Portugal argues that the new rules are in line with other European countries’ crypto legislation, including Germany, where investors pay no taxes if they hold crypto for more than a year. Secretary of State for Tax Affairs António Mendonça Mendes was quoted as saying at a press conference in Lisbon that,
“It’s a regime that fits into our tax system and also to what is being done in the rest of Europe.”
While at the moment the country doesn’t tax crypto gains if they’re not coming from professional or business activities, a provision in the proposed 2023 budget seeks the taxation of gains on crypto holdings that are held for less than 365 days at a rate of 28%, Bloomberg reported, citing the plan submitted to parliament on Monday.
Meanwhile, there will still be no taxes imposed on crypto held for longer than one year.
Furthermore, issuing new cryptoassets and mining operations would be considered taxable income.
There would be a 10% tax on the free transfer of cryptos and a 4% rate on commissions charged by brokers on crypto operations, it said.
The draft budget still needs to be approved in parliament.
Bloomberg noted the rise in the number of foreign residents living in Portugal over the past 10 years, saying that it went up 40% to 555,299 people in 2021, according to the country’s National Statistics Institute. “Some of these residents also benefit from a flat 20% tax on their income or a 10% tax on their pensions, according to the country’s so-called non-habitual resident program,” it
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