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Portugal has remained a country with a neutral attitude towards the digital asset industry for quite some time. Throughout the history of cryptocurrencies, the country has never revised its tax legislation to impose duties on transactions involving virtual money. Due to such an unconventional stance, which has been followed by the Portuguese government for more than 10 years, the country has been dubbed a “tax haven” for the cryptocurrency community. However, as they say, both good and bad things come to an end. This was also the case in this story: the other day, Finance Minister Fernando Medina officially announced that the Portuguese authorities intend to introduce a tax on profits from digital assets in the near future.
It is noted that the first mention of cryptocurrencies in local legislation dates back to 2016. At that time, the authorities excluded cryptocurrency from the list of legal means of payment, which automatically spared citizens who receive income from virtual money from paying tax. In turn, the recent announcement of the head of the Ministry of Finance about the upcoming innovations, should eliminate the same “long-standing” law, equating digital assets to legal means of payment.
According to a recent publication that appeared on the website of the news outlet Sapo, the idea of taxing cryptocurrencies has garnered support from other officials as well. For example, the intention of the Ministry of Finance was supported by Antonio Mendonça Mendes, Portugal’s Secretary of State for Fiscal Affairs.
In this context, it is worth adding that the introduction of the crypto-tax is still only a “promise in words”, because, in fact, even a draft version of the relevant bill does not yet exist. Medina said that neither the exact date of the new rules, nor a specific tax rate has not yet been approved by the authorities. At the same time, the official said that the tax will be imposed on profits derived from investing in bitcoin – the largest coin by market capitalization. Other digital assets will be added to the list of taxable means of payment only over time.
Based on Medina’s speech at the parliamentary session, the tax on cryptocurrency should be adequate, Sapo writes.
“We must establish an adequate tax on digital assets that would not provoke a decrease in the activity of crypto-siders in Portugal. Our goal is to develop a reliable and fair taxation system that will not reduce citizens’ profits to zero, we do not have such a goal,” Medina stressed.
As a reminder, we previously reported that the Central Bank of Portugal issued a license for one of the banks to work with digital assets.
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