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Crypto Exchanges& Regulation in Portugal

Top exchanges in Portugal by Coincub criteria
Article review author
Jonathan Lea
Portugal head image

Crypto Country Rating: 7.4/10

8/10
Institutional acceptance
Favorable outlook to crypto and tax allowable trading
8/10
Exchanges & Wallets availability
Large number of leading exchanges with high presence and access
8/10
Government regulation
Taxation rates reasonable and linked to overall income
5/10
Defi acceptance
No real position taken as yet to DeFi
7/10
Financial services
Growing interest in crypto services and private and public use of blockchain technology
8/10
Transparency
Personal data collection, government tracking, high regulation
6/10
Spending crypto
Many outlets and a high number of ATMs nationwide
6/10
Banks activity in crypto
Banking community able to offer crypto services, with some reservations

Bitcoin and cryptocurrency trading in Portugal

Portugal is something of a crypto hot spot – and for several very good reasons. With favorable tax outlook and a very enthusiastic government, the country is taking the lead in the EU

Using crypto in Portugal

Spend

Portugal has a rapidly expanding digital currency culture and there are at least 4 ATMs dotted around the country with two located in Lisbon. Spending cryptocurrency is growing fast in a number of bars, restaurants and retailers. In addition, many popular world brands accept Bitcoin including Wikipedia, Microsoft, AT&T, and Gyft among others.

Gifting Crypto

In line with its positive stance on crypto, Portugal has no tax on inheritance, wealth, or gifts for residents.

Law and crypto trading in Portugal

Legal

As with many European countries, crypto has leveled the playing field for smaller countries. The global crypto economy has created new financial hubs and leading economies.Portugal officially recognises digital currencies and, within EU legislation, has some autonomy to write favorable crypto legislation. Portugal is one of the most crypto-friendly countries anywhere – perhaps one reason why so many people, especially rich ones, retire there.

Latest legislation

Crypto trading is legal and advanced in Portugal, making it one of the most crypto-friendly countries. All leading exchanges operate in the country. Portugal recently approved two home-based cryptocurrency exchanges with the central bank, the Banco de Portugal; licensing Mind the Coin and Criptoloja.

Taxing cryptocurrencies in Portugal

Tax

Holding crypto and not selling, even if it goes up in value, is not taxable. Any gains made from the

purchase or sale of bitcoin are not taxed. To say this is rare is something of an understatement. Should an individual’s gains from crypto form a major part of their income, then the activity could be subject to tax. There are similar examples of this around the world.

Payments in bitcoin to individuals in Portugal are also not taxed. Companies who deal in bitcoin will be liable to tax on capital gains of between 28% and 35%. Keeping track of your dealings is vital, as much depends on classification and definitions. As always, some things are best sorted out with a trained accountant.

Tax Relief

Much depends on whether you are trading professionally or a casual investor. Crypto trading is both recognized and tax allowable. For expats or financial immigrants to Portugal who declare a tax residency in the country, there is a highly attractive tax regime called NHR (Non Habitual Resident), offering tax reductions and exceptions.

Tax when moving residency

If you are a long-term resident of Portugal you are deemed a permanent resident for tax purposes. Should you move and become resident elsewhere, your tax affairs will come under the jurisdiction of your resident country. Thanks to Portugal’s generous tax breaks for wealthy immigrants, more people are coming into the country rather than leaving it.

Tax for Mining crypto in Portugal

Mining crypto is beyond the scope of most individuals and calls for significant investment in time, money and equipment. However, Portugal’s income tax laws treat mining in the same way as trading – in which case, as a business or professional activity it is likely to be taxed.

Crypto financial services in Portugal

Fin services/retirement account

Most retirement and pension funds worldwide deem cryptocurrencies to be too volatile to become part of long-term retirement schemes. As  Portugal is something of a generous haven for high net worth individuals, those who can pay are more likely to be offered some form of cryptocurrency as an option in retirement planning.

Fin services/Banking interest

Banks have an encouraging openness towards bitcoin but are still very much on their guard against fraud and money laundering. Some have previously restricted crypto transactions but later re-instigated them. Online services such as Revolut are able to buy, sell and exchange crypto – as with all things crypto, the situation is changing all the time.

Fin Services/DeFi

Decentralized finance is behind the rapid interest and growth of cryptocurrency and is underpinned by blockchain technology. Although no DeFi projects have been completed or trialed fully, the Portuguese authorities are interested in such developments and are looking keenly at what is happening in this field. As a member of the EC, major initiatives on DeFi are most likely to come from EU-wide regulatory initiatives

Crypto regulation in Portugal

Security

In Portugal, the central bank requires the registering of bodies that wish to act as virtual asset service providers (VASPs). The bank requires that they comply with legal and regulatory provisions on the prevention of money laundering and terrorist financing (AML/CFT). Improved security for your crypto assets inevitably means increased legislation and regulation. However, security is largely a question of doing your homework. If you lose your keys or get hacked, your most likely form of compensation is through any insurance that your exchange offers on your holdings. Remember that all exchanges have their own levels of security, advantages and disadvantages, so you need to find the service that satisfies your needs best.

Transparency

As with many government bodies, the tax authorities can request information from crypto exchanges and expect compliance with their laws. You’ll need to provide personal details and proof of ID – so anonymous dealing is not possible. Crypto entities must be registered if they are providing exchange services. In addition, bodies providing crypto transfer services and custody of digital assets or instruments must also register with the central bank.

Helpful?
FAQ

New to crypto? Here’s our guide!

FAQ Image #1 01 Why Bitcoin? It seems like the buzz around Bitcoin just keeps growing. Bitcoin is a constantly evolving technology with a passionate community. What is it about the digital asset that makes it such a controversial topic and attractive investment?
FAQ Image #2 02 How to Get Started with Bitcoin It can be difficult to get past the technical jargon surrounding bitcoin (BTC) and other cryptocurrencies in order to figure out how you can buy and store them. Beginners can purchase Bitcoin, for example, on many exchanges using fiat currency like U.S. Dollar, Euro or British Pound.
FAQ Image #3 03 Blockchains 101 Blockchains are a type of database where data is stored in blocks that are chained together. As new data comes in, it is entered into a block, which is then chained to the previous block. The Bitcoin blockchain serves as a ledger that records every Bitcoin transaction in history.
FAQ Image #4 04 Bitcoin in the Real World Ok - you’ve found an exchange, bought your Bitcoin, and stored it safely. What’s next? By now you can buy just about anything with Bitcoin if you try hard enough, from Amazon gift cards to an old master painting. You can also convert your BTC to fiat with ATMs, an exchange, and more.

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