Taxation Authority in Portugal Will Soon Tax Cryptocurrencies

In a recent interview, it was announced that cryptocurrencies will be subject to taxation in the near future. This comes as no surprise considering Portugal’s Minister of Finance Fernando Medina said similar things last week during his speech before Parliament where he addressed concerns about digital currency commerce among other topics like tax evasion and money laundering schemes using virtual currencies such as Bitcoin (BTC). “Crypto taxation is an issue that many countries are tackling,” said Medina.

“The government has announced that they will be moving forward with crypto taxation,” Susana Duarte, a partner at Abreu Advogados in Lisbon, said. Because of its specific circumstances, she added, there is still a lot of uncertainty about how staking or yield farming might change under Portuguese law due to this new policy because it includes “a new and complex way to generate income.”

Portugal was once considered a tax haven for bitcoin investors, owing to a zero capital gains rate.

Duarte added, “The lack of regulation in Portugal has allowed for a tax-free environment that is unique to this country. This, together with an understanding published by the Portuguese tax authority last year means only crypto businesses can be taxed.” Individual and corporate entities are seeking clarification on the government’s proposal to combat tax evasion.

Portugal has one of the highest capital gains tax rates in all of Europe, at 28%.

The Portuguese government has changed its stance on taxes and now treats cryptocurrency exchanges like other financial institutions. This brings them in line with many nations around the globe, including Australia- where earlier this week that country’s tax office warned investors about reporting capital gains or losses from crypto trading each year -the United Kingdom, and U .S., among others.

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