23 February, 2024

Portugal Intends To Tax Cryptocurrency Gains At A Rate Of 28%

1 year ago

22 Nov, 2023

In Portugal, people have been excused from paying capital gains tax on cryptocurrency profits for a long time; however, Finance Minister Fernando Medina thinks it’s time to pay up and is proposing for a capital gains tax of 28% to be applied to cryptocurrency earnings.

The plan stipulates that any income generated from cryptoassets that have been retained for a period of one year or longer would continue to be exempt from taxation.

If the proposed budget is approved in its current form, Portugal would no longer be one of the few nations in Europe that permits taxpayers to retain the entire fruits of whatever cryptocurrency profits they have made.

The Portuguese government also has plans to implement a tax of 4% on any free cryptocurrency transactions, in addition to the imposition of stamp duties in appropriate circumstances.

Medina said:

Portugal is in a different situation, because, in fact, several countries already have systems. Several countries are building their models regarding this matter and we are going to build ours.” He added that “I do not want to commit myself to a date at the moment, but we will adapt our legislation and our taxation.

The prospective shift in Portugal’s tax policy comes at a time when the government is attempting to reduce its deficit and battle weak growth in gross domestic product. The proposal for the budget recommends adding a new component to the current tax law in the form of a tax on windfall profits made by oil and gas corporations.

Portugal is one of the less rich nations in Western Europe; for some time now, the country has been promoting the business-friendliness of its tax laws as an incentive for international investors to make consistent financial contributions to the country’s economy.