Taxation of cryptocurrencies in Portugal: how are cryptocurrencies taxed in Portugal?
Portugal has emerged as an attractive destination for digital nomads, especially those interested in cryptocurrencies. The combination of a favorable tax policy and a welcoming environment makes the country a popular option for cryptocurrency investors. In this article, we will explore the taxation of cryptocurrencies in Portugal, based on legal provisions.
Legal context
Portugal has one of the most favorable tax policies for cryptocurrencies in Europe. According to the Portuguese Tax and Customs Authority (AT), capital gains derived from the sale of cryptocurrencies by individuals are not taxed, provided that they are not considered commercial activities and that these proceeds hold the crypto for more than 365 days.
2016 Tax Authority Order: This order clarifies that cryptocurrency transactions are not taxable under the Personal Income Tax (IRS), unless they constitute business or professional activities.
IRS Code: There was no mention of the taxation of crypto-assets until 2023, the year in which the taxation of income from cryptocurrencies became regulated.
Taxation of Commercial Activities with Cryptocurrencies
If cryptocurrency activities are considered business or professional, the income is taxable. This includes cryptocurrency mining or frequent trading as a main activity.
Article 3 of the IRS Code: States that business and professional income is taxed. If cryptocurrency activity is considered regular and systematic, it will fall under this and other provisions after the 2023 changes.
VAT (Value Added Tax): According to the interpretation of the Court of Justice of the European Union (CJEU), transactions exchanging cryptocurrencies for traditional currencies are exempt from VAT.
Is it worth investing in cryptocurrencies in Portugal?
Many digital nomads see cryptocurrencies as a form of financial freedom that complements their itinerant lifestyle. The flexibility offered by this form of investment is a powerful attraction and Portugal's tax rules complement this.
The big advantage is financial security, which makes it possible to invest in cryptocurrencies without a heavy tax burden, offering extra security for those who have investments and wish to diversify their portfolio.
Conclusion
Portugal offers a favorable tax environment for cryptocurrency investors, making it an attractive destination for digital nomads. The absence of taxation on capital gains for individuals who hold crypto for more than 365 days and the VAT exemption for exchange operations are key points that attract the investor community.
In addition, Portugal has Double Taxation Avoidance Agreements with several countries around the world, helping with tax planning and the payment of taxes as a whole.
If you are interested in hiring professional legal services related to Tax Planning, we are a law firm specializing in the subject. To do so, simply contact us by e-mail: contato@trpuppioadvocacia.com.br, or by WhatsApp.
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