Portugal Crypto: Tax Rules & Regulation #17

Country facts

Portugal crypto score

Trade and store crypto

Zero CGT for long-term holders, NIF residency, and VASP licensing

Cryptocurrency transactions are exempt from VAT, but you can be paid in cryptocurrency and pay for items with crypto visa cards (This may change as many countries are implementing bans on the use of crypto for payments following so many high-profile exchange failures in 2022.

Whilst gains from buying and selling cryptocurrencies are not taxed, any company providing services related to cryptocurrency is taxed on capital gains between 28% and 35%.

Skip the wait. Buy a licensed company.

As with many countries, whether your trading incurs income tax very much depends on whether you are deemed a business or casual investor. If your Bitcoin activities are undertaken as your main source of income, you’ll need to file a tax return. So, the frequency of your trades, the number of exchanges you use, and even the profits you make will all be taken into consideration. A good tax lawyer should put you right.

Crypto Exchanges

Regulated crypto exchanges in Portugal

NAME			RATING	FOUNDED DATE	DEPOSIT METHOD	BASED IN	REVIEW	SIGN UP
#1		Crypto.com	4.6	2016	Credit Card Bank Transfer	Singapore	Coincub Review	Register Now
#2		OKX	4.25	2017	Bank card P2P third-parties crypto	Seychelles	Coincub Review	Register Now

#1 Crypto.com 4.6

Register Now

FOUNDED DATE2016

DEPOSIT METHOD Credit Card Bank Transfer

BASED INSingapore

Review

#2 OKX 4.25

Register Now

FOUNDED DATE2017

DEPOSIT METHOD Bank card P2P third-parties crypto

BASED INSeychelles

Review

Crypto regulation in Portugal

Crypto trading & crypto law in Portugal

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 recognizes 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.

Security

In Portugal, the central bank requires registering 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 compensation is through any insurance 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 best service that satisfies your needs.

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.

Taxes in Portugal

Bitcoin and crypto tax in Portugal

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 that deal in bitcoin will be liable to capital gains tax 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 as a casual investor. Crypto trading is both recognized and tax allowable. For ex-pats 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 a 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.