Taxation: Portugal tightens the screw on cryptos! In Portugal, crypto investors could quickly find a much less favorable environment. Because it is now a question of taxing gains on digital assets purchased and resold over a period of fewer than 12 months.
Portugal is reviewing its copy on the taxation of cryptos!
Considered by many users as a crypto investment or trading paradise, Portugal is changing course. If there was already talk of starting to tax digital assets as early as last May, the measure is becoming more and more concrete. It also appears for the first time as a proposal in the country's budget for the year 2023.
The bill, therefore, marks a major change in policy in Portugal. Because until now, only professional or commercial capital gains were taxed for digital assets. The project also plans to tax the commissions charged by online brokers on crypto transfers. This applicable tax would then be 4%. Finally, Portugal also wants to tackle crypto mining by also proposing a framework for its taxation.
Taxable trading, not long-term investing!
On this point, Portugal seems to want to take on board other initiatives from countries like Germany. As Antonio Mendes, Secretary of State for Taxation justifies:
"It is a regime that is part of our tax system and also what is done in the rest of Europe."
By wishing to tax profits on cryptos held for less than a year. According to Bloomberg, the Portuguese government is working on a capital gains tax on digital assets held for less than 12 months. The amount of the tax should be around 28%, which is quite close to what is practiced in France with the flat tax (30%).
The measure will therefore have an obvious impact on trading which, including for individuals, will become taxed. But it could also slow down investment since it will now be necessary to wait 12 months before being able to resell its assets without taxation.
Will traders have to go into exile?
During the expansion of the digital asset industry, many countries sought to attract investors from all over the world. Today, Portugal seems to want to tighten the screw. Like other countries. Recently, India imposed a 30% capital gains tax on the holding and transfers of digital assets.
The country has also changed its legal framework by introducing a 1% tax on all transactions made via a digital asset. For the crypto exchanges in the country, the tribe has been very heavy and all have suffered a sharp drop in footfall and trading volume.
While the introduction of tougher taxation seems to be becoming the norm, not all countries are adopting the same strategy. This is, for example, the case of South Korea, which has just postponed 2025 its project to tax crypto gains at 20%. For crypto investors, El Dorado could therefore be changing over time.
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