Cryptocurrency is tax-free in Portugal

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Cryptocurrency is tax-free in Portugal

Published on 5th December 2019
Cryptocurrency is tax-free in Portugal
(4.5min read)

If you’re dealing in crypto, then you should take a look at what’s going on in Portugal at the moment. The Portuguese Tax Authority (PTA) has confirmed that crypto transactions are exempt from any value-added tax (VAT) in Portugal. In other words, if you exchange some crypto into fiat currency in the country, that exchange will be tax-free.

How does the Portuguese law apply to bitcoin investors?

  • Income Tax

Besides the exemption of VAT, income made from crypto sales also cannot be taxed. Essentially, what this means is that Portugal is viewing cryptocurrencies as a means of payment - i.e. like any other currency, - rather than just an asset.

  • Capital gains tax

As previously clarified in 2016 by the PTA, all types of cryptocurrency transactions are exempt from capital gains tax and other taxes from crypto transactions, such as:

a) payment for goods and services;

b) buying cryptocurrency for fiat;

c) trading in digital assets.

  • The Non-Habitual Residence tax regime

For crypto traders who want to avoid taxes, Portugal is the right place. Investors in Portugal who have not been tax residents in the country for the previous 5 years can benefit from the NHR scheme. Under this programme, investors may be able to monetise their personal cryptocurrency earnings in Portugal, without being taxed.

Find out if you are eligible for tax exemptions here.

There are, however, some exceptions:

  • although bitcoin transactions are not taxed, if the transfer of the cryptocurrency is related to goods or services then an invoice must be issued and the service should also be taxed; 

  • individuals who deal in cryptocurrency as a professional activity are still required to pay taxes;

  • businesses which offer services relating to cryptocurrencies are taxed on capital gains, ranging between 28% and 35%.

Related Articles:

Portugal Golden Visa and cryptocurrency

Another added benefit to investing in Portugal is the Portugal Golden Visa Programme. Investors may acquire a European passport after 5 years of continued investment in Portugal, giving them the right to work and live anywhere in the Schengen area, which is a shorter period than Greece (7 years) or Spain (10 years). Their dependents, such as children, partners, relatives or financially dependent individuals enrolled in studies, may also be granted residency permits.

Read more about the requirements to apply to the Golden Visa Programme and know why it is worth it.

Key benefits of applying to Portugal Golden Visa as a cryptocurrency investor:

  • Holding two passports ensures future stability and allows you to live and do business in Europe, in 183 countries;

Check here where the Bitcoin ATMs in Portugal are.

 

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To find out more, please contact us:

 

  • Phone: +351 213 471 603
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