Where Portugal was previously considered a crypto tax haven, a bill has now been introduced that taxes capital gains at 28%.
Tax on cryptocurrencies
This became clear after the state budget document for the year 2023 published became. This contained a short section on cryptocurrencies and a possible tax. Because digital assets were previously not recognized as legal tender in Portugal, they remained untouched for a relatively long time.
The section notes that the Portuguese government plans to develop a broad and adequate tax framework, specifically targeting cryptocurrencies in terms of taxation and classification. A proposal is therefore made for all transactions related to cryptocurrencies through activities such as mining or trading, as well as capital gains. The following is reported about this:
Profits related to crypto-assets held for a period of less than one year are subject to the rate of 28% (without prejudice to the aggregation option), whereby the gains related to crypto-assets held for more than 365 days , are exempt from tax.
In cases of transferring crypto in, for example, inheritances, a tax rate of 4% is proposed. With the possible introduction of the bill, security and legal certainty would be offered in the Portuguese crypto market.
A similar stance on cryptos was recently taken in Germany. For example, in May of this year, they released new guidelines with clear income tax rules for cryptocurrency and virtual assets. Individuals who sell cryptos like BTC or ETH more than 1 year after the acquisition will not be liable to pay tax on the sale if they make a profit. It is too early to say what effect this will have on crypto markets worldwide.
