Due to a new crypto tax law that the Portuguese government has proposed, Bitcoin investors may soon be liable to taxes in Portugal.
Fernando Medina, Portugal’s finance minister, has proposed taxing capital gains on cryptocurrency investments held for less than a year in a budget draft to the parliament. Individual nationals were excluded from the country’s existing capital gains tax on bitcoin holdings made through professional or commercial activity. However, the latest budget draft proposes a 28% tax on capital gains on bitcoin assets held for under a year. Gains on cryptocurrencies held for more than a year will not be impacted.
According to the government proposal, earnings from cryptocurrency issuing and mining will likewise be taxed as income. In May of last year, Finance Minister Fernando Medina informed the legislature that taxes will soon be levied on cryptocurrency. The draft plan is still just that, and before it can become law, it must still go through the whole parliamentary process.
Portugal, one of the less developed nations in Western Europe, has long marketed its tax-friendly policies as a way to encourage constant inflows of cash into its economy from international investors. Portugal’s Golden Visa residence by investment program was introduced in 2012 with the goal of boosting employment and reviving domestic industry. Since that time, there are now almost 40% more foreigners living in Portugal.
Crypto Tax Becoming a Popular Idea
Before becoming legislation, the idea must be accepted by the Parliament of the nation. The most recent event occurs just after Portugal’s Finance Minister, Fernando Medina, said that the nation planned to tax cryptocurrency capital gains.
However, these proposals put forward by two political factions were eventually rejected by the Portuguese Congress.
The taxation of cryptocurrencies has recently come under more attention. In addition to a 1% tax deducted at source (TDS) on all cryptocurrency transactions, India levies a 30% capital gains tax on the ownership and transfer of digital assets. However, as a consequence of the strict crypto rules, cryptocurrency exchanges in the nation have seen a dramatic fall in their trading volumes.
On the other hand, South Korea has delayed until 2025 its intentions to impose a 20% tax on cryptocurrency revenues.