Portugal’s draft budget includes new crypto taxes
Important takeaways
- Portugal’s latest budget proposal proposes to impose a 28% tax on gains from short-term cryptocurrency investments.
- The new tax rate will only apply to crypto held for less than a year; long-term investments will remain untaxed.
- The budget proposal has not yet been approved by parliament, and it is unclear whether the details will change.
Share this article
Portugal may soon impose taxes on crypto investors through new rules set out in its draft budget.
Portugal includes crypto in the budget
Portugal may impose a 28% tax on crypto winnings, among other new taxes.
According to a Bloomberg report, Portugal’s 2023 budget proposal defines new tax rates for crypto investors.
One provision proposes taxing gains on crypto holdings held for less than a year at a rate of 28%.
Other parts of the budget proposal suggest that the issuance and mining of cryptocurrency provides taxable income. The budget also proposes a 10% tax on crypto transfers and a 4% rate on commissions from crypto brokers.
Although Portugal may impose taxes on short-term crypto investments, crypto held for more than a year will remain untaxed. Secretary of State for Tax Affairs António Mendonça Mendes said this approach “fits in with our tax system and also with what is done in the rest of Europe.”
Germany, in particular, has a similar rule that exempts crypto held for more than a year from taxation.
Until now, Portugal has been considered a tax haven for cryptocurrency. Currently, it does not impose taxes on most crypto-investors unless they profit from professional or business-related cryptocurrency investments.
Portugal’s latest draft budget also addresses other areas of the economy outside of crypto investments, according to Reuters. The country’s administration proposes to raise taxes on oil and gas companies, reduce taxes for workers in low-income groups and increase pension rates.
Portugal expects an economic slowdown but hopes to cut its budget deficit from 1.9% in 2022 to 0.9% next year.
The budget proposal still needs to be approved by Portugal’s parliament.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH and other cryptocurrencies.
