Not now – The end of Portugal’s crypto tax haven status, is not for now. Lawmakers have said no to two proposals to tax cryptocurrencies. But the taxation of the latter would in reality only be postponed.
Zero tax on bitcoin in Portugal… for now
The two bills aimed at imposing cryptocurrencies in Portugal have therefore been rejected by parliamentduring a 2022 budget voting session, on May 25, 2022. They were proposed by two minority political parties: Bloco de Esquerda and Livre.
Livre wanted taxation of winnings over 5,000 euros. Bloco de Esquerda MP Mariana Mortágua said her party wants to “subject crypto assets to the same rate applicable to capital gains on equivalent income.”
The cryptosphere can rejoice at this news. However the days of a Portugal with tax haven status for cryptocurrencies, are actually probably counted.
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Complex cryptocurrencies: a tax is not enough
Finance Minister Fernando Medina had indicated cryptocurrencies will be subject to capital gains tax.
He said at a press conference on May 21, 2022, that the government was not going to “maintain this vacuum” in the legal system that prevents it from taxing cryptocurrencies.
Fernando Medina did not provide any specific timetable for this future taxation of cryptocurrencies. However, he claimed that the government was planning to introduce a new law “ as quickly as possible “.
The finance minister added that the taxation model would ensure that Portugal remains an attractive destination for the crypto industry.
Bitcoin (BTC) and its cadets could then be associated with other taxes:
- value added tax (VAT);
- stamp duties;
- digital asset ownership taxes.
The country’s Deputy Minister of Finance and Fiscal Affairs, Antonio Mendonça Mendes, indeed declared during the 2022 budget voting session that the taxation of cryptocurrencies was a “complex reality”. Capital gains tax could be insufficient.
Cryptocurrency transactions are currently tax free. Indeed, capital gains for financial investments are taxed 28%. This tax does not apply to cryptocurrencies. Portugal does not currently consider them as a financial asset or a currency.
In the medium and long term, the crypto industry should probably expect a taxation of cryptocurrencies, in all countries the latter are not banned. The beautiful promises of politicians regarding tax provisions favorable to cryptosengage only voters who believe in it.
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