The Finance Minister of Portugal's budget proposal will impose a 28% capital gains tax on cryptocurrency earnings. If it is accepted, Portugal may lose its standing as one of the last European countries to maintain a tax-free stance on crypto.
Earlier, Portugal was considered a haven for crypto investors due to its crypto-friendly tax policy. This can be attributed to a bill passed in 2016 that declared crypto assets non-taxable.
The 2023 budget proposal calls for a 28% capital tax to be imposed on crypto earnings made within a year. This includes the revenue generated from crypto mining and the issuance of crypto tokens.
Game over for the #Crypto paradise in #Portugal. It now has the most significant tax applied to #Crypto transactions and staking.
— $oneplus.ada (@cardano40s) October 10, 2022
It is worth noting that the earnings from crypto assets held for more than a year will remain tax-free.
The draft proposal also aims to impose a 4% tax on free crypto transfers, in addition to charging stamp duties.
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In May, Finance Minister Fernando Medina claimed that the nation would soon implement taxes on crypto investments. In a statement about the taxation on crypto earnings, he added
“I do not want to commit myself to a date at the moment, but we will adapt our legislation and our taxation.”
The 2023 budget proposal was drafted in response to Portugal's slow GDP growth, with analysts expecting only a 1.3% GDP gain for 2023. Besides crypto, the plan will impose tax on the profits made by oil and gas companies.
