Portugal, a country that has long been known as a tax haven for cryptocurrency investors is reportedly making a u-turn in this regard as the imposition of capital gains tax is now on the horizon. As reported by the ECO, the potential to levy a capital gains tax on crypto assets was unveiled by the country’s Minister of Finance, Fernando Medina, who confirmed it during a hearing in the Assembly of the Republic.
While Portugal comes off as one of the very few countries that currently do not impose taxes on crypto-related transactions, the narrative is about to change, however, there is no proposed date at this time.
“Portugal is in a different situation, because, in fact, several countries already have systems. Several countries are building their models regarding this matter and we are going to build ours. I do not want to commit myself to a date at the moment, but we will adapt our legislation and our taxation,” the Minister said.
The fact that there is no EU-wide framework for the imposition of taxes on digital currencies has slowed Portugal’s approach thus far, but the Ministry of Finance and the Secretary of State for Tax Affairs, António Mendonça Mendes are now committed to changing the narrative moving forward.
Portugal to Levy More than Capital Gains Tax on Crypto
According to the report from the ECO, the plan the government has is to levy more than the regular capital gains tax. This is in part due to the fact that crypto is used in many forms including as a means of payment, as salary for staff, and a host of others.
Based on this, a framework for Value Added Tax (VAT) and other forms of taxation is being worked on by the regulators who assure justice and efficiency will be the watchword in implementing its laid down tax strategies.
“We are evaluating, from the point of view of international comparability, what is the definition of crypto-assets, which includes cryptocurrencies. We are evaluating what regulation is in this matter, whether in terms of combating money laundering, or in terms of regulating these markets so that we can present not a legislative initiative to appear on the front page of a newspaper, but a legislative initiative that truly serves the country in all dimensions,” Mendes said.
