Portugal is currently working to amend its crypto-related tax policy. Portugal has been called a “crypto tax haven” because of its lack of taxation. Fernando Medina, minister of finance of Portugal, stated that the country is working on a framework to allow the taxation of cryptocurrency income gains following the principles of “justice” and “efficiency,” and declared that there cannot be gaps for any income gains to be obtained without taxation.
Portugal tightens Cryptocurrency Taxation Policy
Portugal is one of those countries that have been called a “crypto-haven” due to its lack of taxation. It’s currently working to establish laws to allow the taxation of digital assets. Fernando Medina (Minister of Finance of Portugal) made the statements during the state budget debate.
Medina explained:
Many countries have built their models in this area, and we will do the same. While I don’t want to set a date right now, we will adjust our taxation and legislation.
Already, the government was indicating its direction for cryptocurrency taxation. The Ministry of Finance asked the Portuguese Tax Authority to study how crypto assets were taxed in other regions in 2021 “in order to propose an adequate tax framework for these new instruments, taking into account the necessary balance between the fair distribution of income and wealth and the attraction of foreign investment.”
The Models are Still Undecided
While the models by which cryptocurrency gains will be taxed are still unclear, Medina stated that these would be set up following the principles of “justice” and “efficiency,” aiming for a tax system that would not scare cryptocurrency investments out of the country. Medina declared this system should make taxation “adequate,” but not of an “exceptional character that ends up reducing revenue to zero, which is contrary, in fact, to the objective for which it exists.”
However, he was firm in the belief that cryptocurrency should be taxed eventually, stating that there could not be “gaps that cause there to be capital gains in relation to the transaction of assets that do not have a tax.”
Recent real estate deals in Portugal have seen cryptocurrencies become a popular method of paying. A Braga apartment that was being sold for 3 BTC on May 8, is the first such transaction.
What do you think about the statements on crypto taxation made by Portugal’s minister of finance? Leave a comment below.
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