Portugal set to introduce a tax regime for crypto assets: an initial take on the new measures
As anticipated in our recent article on this matter (see here), the 2023 Portuguese State Budget proposal brought some clarifications and interesting news concerning the taxation of crypto assets in Portugal. Besides clarifying the tax regime, the Portuguese Government has renewed its commitment to ensuring a solid framework for investors.
Crypto tax in Portugal: what changes?
This budget proposal provides the following:
- Gains obtained with crypto assets will be subject to a 28% tax rate whenever the crypto assets sold are held for less than one year - a transitional rule states that the holding period of crypto assets acquired before the date of entry into force of the State Budget Law is considered for counting the holding period;
- Taxpayers holding crypto assets for at least one year will be exempt from personal income tax on capital gains.
Furthermore, transactions such as mining or staking will now be included in a non-exhaustive list for the purposes of taxation under Category B (Professional/Business Income).
The draft bill also provides that the donation of crypto assets will be subject to stamp duty at a 10% rate and that the intermediation commissions on cryptocurrency transactions will be subject to a 4% tax rate.
Additionally, this budget proposal introduces reporting obligations for natural and legal persons/entities that provide custody and administration services or management of crypto assets trading platforms. These will have to report to the Portuguese Tax Authorities all the transactions made until the end of January of the following year.
The draft budget bill (draft bill no. 8/XV/1.ª), as submitted to the Parliament on 10 October 2022, is available here (in Portuguese only).
The first phase of the discussions in the Portuguese Parliament will be concluded with the (expected) approval of the draft bill on 27 October 2022. After this approval, the bill will be further discussed on specific points (which typically provide some amendments to the tax measures), meaning that the final approval will only occur by 25 November 2022, well in time for its entry into force on the first day of 2023.
We are available to guide you through this new landscape and help you navigate between the current regime and future regulations.