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Crypto taxation in Portugal

15 June 2022

Did you know that digital assets are tax-free in Portugal?

Portugal has established its reputation as one of the best crypto tax havens worldwide. And this is not for nothing. Due to the several tax-free cryptocurrency regulations taken in 2016, this country is now a magnet for crypto enthusiasts and one more reason to get a Portugal Golden Visa in order to relocate to this country on a legal basis. What is there to say if even a Roger Ver, a so-called “Bitcoin Jesus,” has decided to take residence there. The same goes for the “Bitcoin Family,” which believes that Portugal is “a very beautiful bitcoin heaven.”

Crypto citizenship

Only in 2021, Lisbon hosted two major crypto events: an Ethereum conference and Europe’s first crypto art festival, Rare Effect. Portugal also has one of the biggest blockchain communities, with hundreds of groups passionate about blockchain technology and dealing in different cryptocurrencies.

In fact, Portugal sets a great example in terms of crypto-friendliness, boasting a little legal and regulatory burden on cryptocurrency businesses.

What are the details? Read this article and explore what drives crypto adoption in Portugal!

Portugal — a vibrant place of crypto life in the world

Did you know that Portugal hosts a lot of crypto-focused events? (such as the Solana Conference and Web Summit). This helps bring more crypto luminaries and make this country literally a home for crypto-minded people! 

Want to join this thriving Portuguese crypto community? Then Portugal Golden Visa is just what you need! 

Portugal crypto tax: How does it work?

According to the Portuguese tax law, digital money is not seen as financial assets or foreign currencies. This means that you can keep to yourself all your savings, and they would not be taxed.

However, unfortunately, it’s not all that simple.

Portuguese tax authorities believe that your crypto earnings should not be taxed unless you do it as professional trading. Here everything depends on your entrepreneurial activity.

Below are some main points to determine whether your trade activity should be taxed or not:

  1. The frequency of your trade and the number of crypto transactions
  2. Your profit level
  3. Where you generate income (whether there is the main activity or not)
  4. The number of trader platforms you are using
  5. The duration of financial products holding

It is obvious that you will not be regarded as a professional trader only if one of the qualities stated above applies to you. However, it is always helpful to talk to a lawyer to get things in order.

Technically, cryptocurrencies are not considered money, as they do not have a legal tender in Portugal. However, it would be best to understand that you can always exchange digital money for real currency. And that’s quite a different story.

To better understand this crypto issue, it is important to say that cryptocurrencies can generate different types of income:

  1. Gains derived from sales of products or services
  2. Gains obtained from the purchase, exchange, or selling of cryptocurrency
  3. Commissions for the delivery of services linked to obtaining crypto

So what do we have at a dry rest?

Unlike most other European countries, Portugal is one of the few states which does not levy capital gains tax on crypto gains. Not all governments want to make money from the virtual currency boom, and Portugal is just another proof of this statement.

To confirm this, just look at the table below.

Country Classification Type of tax Tax rate
Australia Property Progressive income tax GST 19-45% 10%
Belarus Digital asset NA NA
Brazil Asset Capital gains tax 15%
Canada Asset Progressive income tax 15-33%
China Virtual commodity Progressive income tax (for international trading) 3-45%
Denmark Private money NA NA
France Property Capital gains tax 30-34%
Germany Private money Progressive income tax 0%-45%
India Digital asset Progressive income tax GST 0-30% 18%
Israel Digital asset Progressive income tax VAT 10-50% 17%
Japan Property Progressive income tax Consumption tax 5-45% 8%
Malta Commodity NA NA
Netherlands Asset Income tax 30%
Panama Digital asset NA NA
Portugal NA NA NA
Russia Digital asset Income tax 13%
Singapore Property NA NA
Slovenia Movable property NA NA
South Africa Intangible asset Progressive income tax 18-45%
South Korea Property Income tax VAT 20.9% 7%
Sweden Digital asset Progressive income tax 0-57%
Switzerland  Movable property Progressive wealth tax Progressive income tax 0-0.67% 7-34%
Turkey Commodity Progressive income tax 15-35%
UAE NA NA NA
UK Private money or Asset Corporation tax Progressive income tax 19% 0-45%
USA Property Capital gains Progressive income tax 0-20% 10-37%

Portugal — a vibrant place of crypto life in the world

Did you know that Portugal hosts a lot of crypto-focused events? (such as the Solana Conference and Web Summit). This helps bring more crypto luminaries and make this country literally a home for crypto-minded people! 

Want to join this thriving Portuguese crypto community? Then Portugal Golden Visa is just what you need! 

Portuguese tax law: Personal Income Tax and Capital Gains Tax

Actually, the profits from your crypto trading can fit in one of the income categories — Self-Employed Worker, Capital Yields, and Capital Gains.

  1. Capital Gains — Category G. Category G implies that your capital gain will be taxed at a flat rate of 28%. However, the taxpayer may also pay at the progressive tax rates in some cases. This category qualifies sale of shares, sale of an apartment, etc. According to the Portuguese tax authority, cryptocurrency trading is not regarded as an event that constitutes capital gains following the list created by the Personal Income Tax Code.
  2. Capital Yields — Category E. Category E covers shareholder loans, bills, or other types of dividends, which should be taxed at a flat rate of 28% or less. Crypto gains do not follow this category because the earnings do not come from the capital application.
  3. Professional Income — Category B. Category B refers to freelance workers (as an example). If cryptocurrency trading is your professional activity, then it is not considered tax-free.

Crypto taxation in Portugal — Migronis

From all the above, one can conclude that crypto gains normally don’t fit into any income category, and investors should pay taxes only in case of professional activity. In this case, crypto traders should open activity (register a Portuguese company) and pay taxes.

If you are a crypto trader planning to relocate to Portugal, then you can take advantage of the different options. However, the most popular routes remain the Portugal Golden Visa and D7 Visa.

Want to know more? Reach out to our guide and learn about the benefits of this method!

Crypto taxation in Portugal — Migronis

Taxes on Bitcoin in Portugal

As it was stated above, Portugal does not levy a capital gains tax on your crypto gains. Crypto transactions are exempt from Value Added Tax (VAT). Thus, crypto investors do not have taxation on all the gains related to crypto trading platforms and crypto income.

Wonder how to pay taxes in Portugal? Reach out to this article and find out answers to all your questions!

Non-Habitual Regime

The Portuguese government sets a special tax regime for new tax residents providing a tax exemption applicable for foreign-sourced capital income. It also allows benefiting of reduced tax rates on Portuguese-sourced income as well. A key feature of Portugal’s NHR regime lies in the Double Taxation Agreements (DTA). Due to the DTAs, Portugal makes most categories of income to be taxed in the country of source of income, which does not happen in practice. To be eligible for NHR, you should comply with a number of requirements, among which the main one is not to be a tax resident of Portugal for the last 5 consecutive years.

GOLDEN VISA PRESENTATION

Let’s see our best examples of Portuguese real estate and learn about conditions of funding to get the Portuguese Golden Visa! 

Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis
Crypto taxation in Portugal — Migronis

How To Move To Portugal

One of the best ways to move to Portugal is with the help of the Portugal Golden Visa. The Portugal Golden Visa is a Residency-by-Investment Program launched in 2012, which helps boost the country’s economy. This highly favorable investment scheme is perfectly designed for non-EU nationals.

To be eligible for Portugal Golden Visa, you should choose from a range of relatively affordable investment options that will give you both permanent residency and an opportunity to become a national of the European Union in 5-6 years.

Want to know more about Portuguese tax system?

Then read this guide and get insights about all the nuances! 

Crypto taxation in Portugal — Migronis

Frequently Asked Questions

Is Portugal a crypto haven?

Since Portugal does not tax crypto gains (unless you are a professional trader), it is no exaggeration to say that Portugal is a crypto haven.

Why is Portugal a tax haven?

Portugal is beneficial for many. Firstly, this happens because of the NHR, a preferential tax regime, which enables to enjoy reduced tax rates on Portuguese-source income while income generated from other countries would be exempt from Portuguese taxation. Another important benefit is that Portugal does not levy taxes on your crypto assets (unless this is a professional trading activity).

Do I need to declare crypto in Portugal?

According to Portuguese law, you don’t need to declare your capital gains resulting from cryptocurrency trading. Therefore, you are exempt from paying crypto taxes unless it is a professional or entrepreneurial activity.

Can I buy citizenship with cryptocurrency?

Yes, some crypto-friendly countries permit using your cryptocurrency in order to buy second citizenship.

Why Migronis is your best partner in obtaining Portugal Golden Visa

  1. Expertise. Migronis is an international company based in Europe with Ukrainian roots. The company’s owner, Anatoly Letaev, is a well-known entrepreneur, a human rights lawyer, and an expert in the field of Citizenship-by-Investment. He lives in Portugal and strongly promotes the idea of personal freedom.
  2. Local presence. Our headquarter office is located in Portugal to meet our customer’s needs at the highest possible level. This might definitely save you time, effort, and money. And we have offices in Ukraine, the USA, United Arab Emirates, and Cyprus. Furthermore, due to the local presence in many countries, we are able to ensure the correct completion of the client’s application form, help prepare all required documentation, and handle everything on behalf of the applicant
  3. Multicultural team & multiple languages. For an international company dealing with the CBI market, having team members who have a wide variety of cultural knowledge is a key. This is the only way to understand customers and their needs and do our best to serve them.
  4. Access to unique products/developments. We work with the most trusted developers and, thanks to our local presence, we can personally check everything regarding real estate and many other issues.

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