The Portuguese Finance Minister, Fernando Medina, has announced that his country will begin taxing cryptocurrency. According to a local news outlet, Secretary of State for Tax Affairs António Mendonça Mendes seconded the crypto tax. This is in regards to the Portugal move.
Crypto taxing in Portugal
Medina explained his reasoning for the tax during a working session in parliament. He compared Portugal to countries that “already have systems” in place. Furthermore, Medina stated that it does not make sense for an asset not to be under taxation. Specifically, he speaks about an asset that generates capital gains.
Medina does not plan to tax crypto earnings at a high rate. He went on to say that it’s critical to design and implement a system that makes taxing “adequate” but doesn’t “end up reducing revenue to zero, which is contrary to the objective for which it exists.”
When will Portugal start taxing crypto?
The launch date for the crypto tax in Portugal is still unknown. However, it will be under imposition on investment gains from cryptocurrencies such as Bitcoin (BTC). This would overturn a 2016 tax law that said that because cryptocurrency is not legal tender, gains cannot be under taxation.
During the Parliamentary working session, Mendes stated that bitcoin taxes are more challenging than most other assets. That is because “there is no universal definition of cryptocurrencies and crypto-assets.”
“We are evaluating what regulations [fit] this matter […] so that we can present not a legislative initiative to appear on the front page of a newspaper, but a legislative initiative that truly serves the country in all its dimensions,” he said.
Until now, Portugal has been regarded as a crypto tax haven, offering a permanent residency card known as the Golden Visa, which provides holders with specific tax benefits and a road to citizenship. The country created the Golden Visa scheme to encourage international investment.