Portugal Parliament to Tax Cryptocurrency Soon But There’s a Catch

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Portugal is currently counted as one of the crypto tax-free countries and may soon change its label to crypto-taxed countries. Portugal does not consider cryptocurrencies as foreign currencies of financial assets. Thus, the profits from trading cryptos are not taxed in the country, this makes a southern European country a crypto paradise.

The Finance minister of Portugal had recently declared his plan to start taxing crypto in the country. But this has to go with an even more regulatory framework and the time frame is not yet decided for the adoption. 

Regarding the crypto taxation in the country, the parliament of Portuguese voted against two separate proposals from minority political parties to tax crypto assets. The new law to close the tax loopholes of Portugal clarifies that VAT and capital gains are not taxed to individuals for their transactions of crypto assets. rather, the government only taxes business activities related to crypto transactions.  

The Economic newspaper ECO of Portuguese had reported that the proposal had come from the left-wing parties Bloco de Esquerda and Livre, and both were rejected on Wednesday afternoon during the budget voting session of 2022. According to livre’s proposal on crypto taxation, the gains should be taxed above €5000. 

A member of Parliament with Bloco de Esquerda, Mariana Mortagua being very vocal about crypto taxation, criticized the government for failing to find a way to tax crypto. adding to this she said: 

“Regardless of necessary future crypto regulations, our contribution to put an end to this offshore is to subject crypto assets to the same rate applicable to capital gains on equivalent income.” 

Further, the country’s finance minister had also argued about the gaps resulting in certain gains not being taxed in the country. 

The Crypto tax-free days of Portugal may still be continued, as the government has to go more with a regulatory framework on cryptocurrency, and the time frame has also to be committed.