The Portuguese congress, Assembleia da Republica, has rejected two bills that would have imposed a tax on cryptocurrencies.
Portugal has long been considered a tax haven for cryptocurrencies; crypto trading has been tax-free since 2018. Additionally, digital asset trading is not considered investment income in Portugal. This has attracted startups and cryptocurrency events to Lisbon, even though businesses that accept bitcoin must pay income tax for it.
Portuguese Finance Minister Fernando Medina had recently stated that cryptocurrencies in the country will soon be subject to capital gains tax. Nevertheless, two minor political party bills to tax cryptocurrency assets were rejected by the Portuguese Assembleia da Republica.
The news was welcomed by Derek ‘Isaac’ Kaplan, founder of DuoVerse and VMining, who said that any “unreasonable taxes” would have been a negative for the growth of the cryptocurrency sector. He told Cointelegraph that:
“Although a regulatory framework is important, we need to give the sector the space to grow. The cryptocurrency industry is nascent and should not be subject to the same rate applicable to capital gains on equivalent income, as it would be unfair. This development reflects that crypto-friendly sentiment is strong in Portugal.”
According to the economic newspaper ECO, the proposals were from the left-wing parties Bloco de Esquerda and Livre, which were rejected during the vote on the 2022 budgets on Wednesday afternoon. The government was asked to explore the possibility of taxing cryptocurrency gains in excess of €5,000 ($5,345.75).
If you guys want to move to Portugal
You can sleep on my floor
0 tax on crypto
— Cozy ⓣhe Caller (@cozypront) May 25, 2022
If they want to move to Portugal, they can sleep in my flat. There are 0 taxes on cryptocurrencies.
In Portugal, cryptocurrency transactions are not subject to capital gains tax or any other tax. Compared, the current tax rate on capital gains for financial investments is 28%. The country’s Deputy Minister of Treasury and Finance, Antonio Mendes, declared in the same session of Parliament that the taxation of cryptocurrencies is a “complex reality”, and that capital gains may not be enough.
An expat in Portugal in February praised the West Iberian nation’s rate of cryptocurrency adoption among merchants and even predicted that bitcoin could one day become legal money there, as reported by Cointelegraph. However, you may have a lot on your mind now that government officials are pondering how to tax digital assets.
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