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Portuguese government plans to tax cryptocurrency revenues

Quick Take

  • The Ministry of Finance is eyeing a capital gains tax for crypto.
  • Portugal currently doesn’t view cryptocurrencies as an asset and they are instead treated as a currency.

Portugal’s days as a tax-free haven for crypto investors may be coming to an end. That’s according to Portuguese news outlet ECO, which reported last week that the government is planning to bring in new regulations around crypto assets.

The minister of finance, Fernando Medina, confirmed on Friday during a working session that crypto assets will be subject to taxation in the near future. The Portuguese tax authorities are currently looking at cases in other countries to inform recommendations for regulation.

“Several countries already have systems. Several countries are building their models regarding this matter and we are going to build ours,” Medina said.

He additionally emphasized that there couldn’t be any “gaps that result in there being gains related to the transaction of assets that aren’t taxed.”

At present, Portugal doesn’t view cryptocurrencies as an asset and they are instead treated as a currency, meaning that while businesses that provide cryptocurrency services are taxed, individuals investing in them are not. Medina has suggested that this is more due to a gap in the regulatory system than by actual design.

Nevertheless, the lack of tax legislation for crypto has made Portugal a popular spot for traders, with some having even dubbed it “bitcoin heaven.”

Details are still thin on the ground as to exactly what new regulations will entail, however the Ministry of Finance seems to be eyeing a capital gains tax. Following Medina’s comments, the secretary of state for fiscal issues Mendonça Mendes also floated the idea of subjecting cryptocurrencies to VAT and Stamp Tax.

The government has not yet  announced any specific dates for the introduction of new regulations.

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