Portugal Crypto Tax: Why It's the Best Place for Crypto Tax

Did you know that 5% of Portugal's 10.3 million population is foreign-born?

This is a companion discussion topic for the original entry at https://www.movingto.io/pt/portugal-crypto-tax
1 Like

Is Portugal changing its crypto tax laws? I heard they may be amending it in 2022? Does anyone know anything about this?

cryptocurrencies in Portugal are only taxable if you do it as a professional trading activity and therefore you need to open an activity as a trader and pay taxes according to your profit, otherwise, they are considered non-taxable in Portugal due to being unable to fit in any category.

That means that Portugal will treat cryptocurrency as a form of currency, making it exempt from VAT and capital gains. That’s consistent with its policy on other currencies: Portugal does not tax the gain on the value or sale of any currency.

With the announcement, Portugal has made it clear that it is - at least for now - a tax-friendly home for those who buy and sell cryptocurrency.

Ana, Co-Founder @ movingto.io

There’s lots of rumours about this happening Q2 next year. Nothing concrete though. Let’s see…

You need to be a bit careful that you’re not a trader. If you’re a trader and it’s your main source of income, you’ll be taxed on it.

If it’s mostly passive income and not your main source of monthly income, it’ll be tax-free :slight_smile:

Wow! Good to know. I wonder what constitutes a trader though? How many trades does it take?

It’s just rumours. I highly doubt it’s going to happen. When I spoke with my tax lawyer in Portugal, she said it’s not going to happen. Too many rich people moving to Portugal for this reason and it gives them an edge to attract talent from Europe and elsewhere.

The only way they’re going to change this is if the EU somehow forces them to. Again, I don’t think this is likely as Germany is all crypto tax-free.

The other thing you need to be a bit cautious of is that companies are taxed on crypto earnings. It’s only tax-free if its personal investments and it’s not your main source of income.

1 Like

Yes, the general rule of thumb is that you’re investing for the long-term, you’ll be fine. If you’re doing daily trades, you might be in trouble.

I’d love to know which other countries have tax-free crypto. Countries like the US and UK are starting to have really bad crypto-tax policies, so we need alternative places to go if they continue.

How does it compare with Germany? I hear Germany also has tax-free crypto?

Like most things tax related, it depends.

If you’re talking about small amounts of money, then generally, yes. This means sales that are under 600 Euros are tax exempt for individuals.

If it’s a larger sum of money then you need to hold onto your crypto for at-least 12 months for it to be considered a long-term holding and thus not taxable under German tax laws.

Like Portugal, if you’re a day trader, you will pay taxes on your earnings.

If you’re looking for tax-free crypto, you should also consider Dubai. It’s completely tax-free, even for traders and a lot of the crypto community are moving out there because of it. Portugal is good, but only if you’re an investor, not a trader. If you’re trading constantly and it’s your day job, Dubai is probably better for you.

I own some Bitcoin, but don’t really plan to sell anytime soon, so Portugal is the better option for me. Hopefully Portugal keep these rules!