Portugal Makes U-Turn on Cryptocurrency Tax
Reversing its previous hands-off stance, the nation will impose taxes on the exchange and sale of cryptocurrencies.
May 16, 2022 at 4:24 p.m. UTC:format(webp)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/34R3CWF4URGW5EI2AX7QAQWINQ.jpg)
Portugal has made a U-turn on taxing cryptocurrency. (aayush_gupta/Unsplash)
Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.
Portuguese Minister of Finance Fernando Medina said cryptocurrencies will be subject to taxation in the near future, according to comments in the nation's parliament on Friday, as reported by Sapo.
- “Many countries already have systems, many countries are building their models in relation to this subject and we will build our own,” Medina said on the taxation of crypto.
- "The government has said that [it] will move forward with the taxation of crypto," Susana Duarte, an associated partner at Abreu Advogados law firm in Lisbon, told CoinDesk. While she confirmed the new policy will include a capital gains tax, the government, she said, has not yet explained how staking or yield farming might be affected.
- Portugal was previously considered a tax haven for cryptocurrency investors, in part due to an effective capital gains rate of zero.
- "There is no specific law, it is just a lack of regulation that led to the zero taxation in Portugal," said Duarte. "This together with an understanding published by the Portuguese tax authority in 2016 meant that only crypto-related businesses can be taxed."
- As for her local clients, Duarte said there's concern, with both individual and corporate entities seeking clarification and certainty on the government's proposal.
- The current capital gains tax rate for financial investment in Portugal is 28%.
- Portugal's changed stance on taxes brings the country in line with many other nations around the globe. Among them are Australia – where earlier Monday that country's tax office warned investors of the need to report capital gains and losses on crypto each year – the United Kingdom and the U.S.
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Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.
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Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.
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