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Operations with cryptocurrency in Portugal will be taxed in 2023

November 10, 2022

4 minutes read

From 2023, cryptocurrency transactions in Portugal will be taxed

Due to the perception of cryptocurrency as an ordinary currency rather than securities, Portugal has had a reputation as a cryptocurrency haven for many years. However, the government is already planning to introduce taxation on cryptocurrency transactions.

Information about the changes had already been published in the media, so no one was surprised when Portugal's Minister of Finance Fernando Medina presented the draft state budget for 2023. It included an innovation about taxation of cryptocurrency transactions and information about fees. According to them, the tax on brokerage commissions will be 4% and the tax on free transactions will be 10%. Capital gains tax for crypto-assets that are held for no more than 365 days is 28%, the same as the same fee for regular currency.

Portuguese authorities take into account that it is the status of the country free of taxes on cryptocurrency that has attracted significant investments and opened new employment opportunities for people. As a result, Portugal has attracted the interest of foreign residents with high purchasing power, but they may be discouraged by the aggressive tax policy on cryptocurrency. The whole point is that the European Union considers it an unfair advantage for the state to take such a lenient approach and wants Portugal to impose tax levies on transactions between digital currencies.

Lawyer Pedro Catao Pinheiro of the large law firm Next Lawyers Gali Macedo & Associados specifies that the proposal will still be discussed in the Portuguese Parliament, and a final vote on the innovation will take place on November 25. The proposal is expected to be approved with minor amendments and the cryptotransaction rules will come into force in January 2023.

The benefits of changes

Pinheiro also argues that the innovations should be taken positively because they clarify the future of Portuguese cryptocurrency policy. However, no new tax obligations are expected.

But the demand for gold and D7 visas, which are issued to financially independent foreigners, is expected to be minimized. And the reason for this will not be changes in cryptopolitics, as many feared. Back in May 2022, Patricia Valadas Coriel of the law consulting firm Valadas Coriel & Associados said that applicants for "golden visas" are rarely tax residents. We're talking about people who get entry permits in exchange for investments. They are interested in obtaining a residence permit without moving to Portugal and requesting citizenship status after 5 years. That is, they are not concerned with tax-related changes.

A slightly different situation with applicants for a visa D7: they are more attracted to the status of non-permanent resident, than the relaxed cryptopolitics. It is this advantage that ensures the inflow of remote workers to the country, while the tax benefits for cryptocurrency are of interest only to a small percentage of applicants.

If you are interested in obtaining a visa to Portugal, contact our immigration experts for advice. You can contact them through the website or by phone.

Source: Imidaily

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