Portugal’s Assembleia de Republica, the country’s Congress, found itself in crypto news recently after it rejected two tax bills, which if passed would have imposed taxes on cryptocurrencies.
The Backdrop to the Bill Rejection in Portugal
Cryptocurrencies have been away from tax obligations in Portugal since 2018. People trading in cryptocurrencies do not have to pay any tax on their transactions. The country does not consider any income resulting from digital asset trading as an investment.
But Portugal requires businesses accepting bitcoin payments to pay income tax on the income.
Given the crypto advantages, Portugal has till now been one of the most favored destinations for crypto start-ups, and events based on cryptocurrencies and digital assets. This preference has been active despite the income tax levy on bitcoin income.
It should also be noted that only recently that the country’s finance minister Fernando Medina, revealed that the country would soon be levying capital gain tax on cryptocurrencies.
Given this background, the latest development of rejection of crypto tax bills gains significance.
Two separate bill proposals were put forth by the country’s minor left-wing political parties demanding a tax on cryptocurrencies. Livre and Bloco de Esquerda are the political parties that proposed the said tax bill.
The tax bill proposed that crypto taxes above €5, 000 should be brought under tax consideration. The bills were however rejected by the Congress during the budget voting session.
It is significant that the Socialist party, the country’s ruling party, has so far not submitted any bill demanding cryptocurrency tax, despite the recent declaration by the finance minister.
Portugal imposes no tax, capital gain tax or other, on cryptocurrencies. Other types of financial investments, on the other hand, attract 28% in capital gains though.
It would be interesting to watch further cryptocurrency developments in Portugal, which continues to exert its pull on crypto-enthusiasts.
Keep watching this space for more updates!