Portugal’s Proposed Budget Would Introduce New Crypto Taxes

Portugal could soon impose taxes on crypto investors through new rules set out in its draft budget.

Portugal includes crypto in budget

Among other new taxes, Portugal may levy a 28% tax on cryptocurrency capital gains profits.

Bloomberg reports that Portugal’s draft budget proposal for 2023 specifies higher tax rates for cryptocurrency investors.

According to one clause, gains on cryptocurrency investments held for less than a year would be subject to a 28% tax.

The draft budget’s other sections imply that bitcoin mining and issuance generate taxable income. A 10% tax on cryptocurrency transfers and a 4% levy on commissions from cryptocurrency brokerages are also proposed in the budget.

Portugal may impose taxes on short-term cryptocurrency investments, but taxes won’t apply to cryptocurrency held for longer than a year. This strategy “fits into our tax system and also to what is being done in the rest of Europe,” according to Secretary of State for Tax Affairs António Mendonça Mendes.

A comparable law that exempts cryptocurrency held for more than a year from taxation is most notable in Germany.

Portugal has previously been regarded as a Bitcoin tax shelter. Unless they are making money through professional or business-related cryptocurrency investments, it does not currently impose taxes on the majority of bitcoin investors.

According to Reuters, Portugal’s most recent draft budget also addresses other economic sectors besides cryptocurrency investment. The government of the nation supports boosting taxes on oil and gas companies, decreasing taxes for low-income people, and raising pension rates.

Despite anticipating a slowdown in its economy, Portugal plans to reduce its budget deficit from 1.9% in 2022 to 0.9% the following year.

The Portuguese parliament still needs to approve the draft budget.

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