Portugal bringing in crypto taxes

• 15 October, 22

Portugal will no longer be a tax haven for crypto, with capital gains and business income from crypto-assets to now be taxed.

The creation of a new tax framework applied to crypto-assets is one of the new features of the State Budget for 2023 (OE2023). This new crypto-asset taxation regime will cover both the IRS income tax and Heritage Tax (IMP) and, according to the proposal delivered to Parliament, it promotes the “security and legal certainty” of these businesses.

Income taxes

Equity increase or capital gains (Category G of the IRS): the gain on capital gains is calculated by the difference between the realisation value (which is assumed to be the market value at the date of sale) and the acquisition value, being that expenses associated with the business are deductible. “For capital gains referring to crypto-assets held for a period of less than one year, a rate of 28 percent is applied (without prejudice to the option of aggregation), with capital gains referring to crypto-assets held for more than 365 days exempt from taxation” . As for the timing, it is anticipated that crypto assets purchased before January 1, 2023 will be taken into account. “The losses determined in these operations, in a given year, may be deducted in the following five years, when the taxable person opts for their aggregation”, explains PwC.

Stamp duty

“In terms of assets, it is expressly provided for the taxation of free transfers of crypto-assets, as well as the levy of Stamp Duty on commissions charged in the intermediation of transactions related to crypto-assets, subject to a rate of 4 percent (in in line with most financial operations)”, explains the OE2023 proposal.

Selling ​​houses in cryptocurrencies

To improve communication and transparency of cryptocurrency operations, the Government also wants those involved in these deals to be obliged to report them to the Tax Authorities.

Cre: Portugalnews