James Atkins
Editor
Editor
For a long time, the cryptocurrency sector considered Portugal to be the promised land because the government was permissive with crypto. As a result, many individuals have relocated their cryptocurrencies to Portugal’s warmer climes.
Finance Minister Fernando Medina states at a session of the Portuguese parliament. That crypto assets in Portugal will soon be subject to capital gains tax, according to news source ECO. Secretary of State for Tax Affairs António Mendonça Mendes verified this.
A capital gains tax is levied on the profit generated by the sale of cryptos. If you purchase bitcoin for €100 but then sell it for €110? Then you’ve made a profit of 1000 euros, which must be taxed at a rate of 28%.
That simply means, that every time a Portuguese person trades cryptocurrency for fiat currency, he or she loses over one-quarter of the funds.
The United Kingdom’s tax department has yet to make any statement regarding taxation on cryptocurrencies.
When you declare crypto gains as income. They are taxed at the same rates as any other income, ranging from 0 percent to 45 percent, with a personal limit of £12,570.
Before now, Portugal did not regard cryptocurrency as a source of wealth or an investment, but rather as another currency. As a result, since 2018, crypto has been exempt from capital gains tax in Portugal.
The country has decided to reconsider its position and consider crypto assets rather than money, allowing them to charge a 28 percent profit tax.
Portugal has a long history as a tax haven for crypto. Portugal is well known as one of the most appealing crypto tax havens in the world because cryptocurrencies were inadequately taxed.
It also helps that Portugal is home to gorgeous cities, exquisite meals, wonderful beaches, and (albeit) stable currency and government.
This has prompted numerous crypto firms, exchanges, and gatherings to relocate to Portugal. Portuguese government officials have stated that the implementation of a 28 percent capital gains tax should not be considered a deterrent.
Instead, Portuguese authorities have stated that they have always wanted to regulate cryptocurrencies. And that they have studied how other nations changed their rules. Portugal has been able to make decisions based on this fact.
“It’s an area where there is a lot more understanding and progress to be made. So Portugal can benefit from international expertise,” Medina tells parliament.
Portugal may very well want to impose additional crypto-related charges for longer. António Mendonça Mendes, Secretary of State for tax matters states at the same session.
That “cryptocurrencies are a much more complicated reality, than taxes alone when it comes to capital gains.” He also suggests that cryptocurrencies in Portugal might be subject to VAT or real estate taxes.
“We are evaluating the best regulation in this matter so that we can present not a legislative initiative to appear on the front page of a newspaper, but a legislative initiative that serves the country in all its dimensions.”
The fact that our kitchen isn’t extraordinary, the weather is more often gray than blue, and life is too expensive. However, all crypto enthusiasts may as well visit the Netherlands.
It’s too soon to say whether the new tax will be effective in deterring businesses. As it might take years for this to become law in Portugal.
If the legislation passes, all of these firms and individuals using cryptocurrency will undoubtedly move to Madeira. Where crypto taxes are favorable and bitcoin will be legal currency.
I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.
