Portugal Proposes Crypto Income Tax In New Draft Budget

The government of Portugal suggested a 28% income tax on cryptocurrencies in its draft budget for 2023, which was revealed on Monday.

The tax would only apply to cryptocurrencies owned for less than a year, with gains from crypto held for longer periods of time remaining free.

Free crypto transactions would also be taxed, while commissions made by intermediaries would be taxed at a 4% rate.

The budget will still be debated and approved by Parliament in the following weeks. Given its overwhelming majority, the ruling party (PS) has the ability to see it through on its own.

During a 2022 budget vote session in May, the Parliament rejected two distinct proposals for a crypto tax from minority political parties.

Earlier that month, Portugal‘s finance minister, Fernando Medina, revealed his intention to begin taxing cryptocurrency, indicating that the government will work on the regulatory framework. He also stated that there should be no gaps in the law that result in some earnings not being taxed in the country.

The government stated that by establishing a framework to promote the cryptoeconomy, these steps will create a sense of safety and legal certainty.

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