According to a government-issued report published Monday, the Portuguese government has proposed a new cryptocurrency tax policy that would go into effect as part of its 2023 national budget.
A small section of the nearly 450-page macroeconomic strategy and fiscal policy report states that the Portuguese government will charge a capital gains tax of 28% on cryptocurrency gains made within one year. Gains realized after one year of holding crypto assets, on the other hand, will be exempt from such a tax.
The Portuguese government also plans to levy a 4% tax on any free cryptocurrency transfers, as well as stamp duties where relevant.
The proposal seeks to treat cryptocurrency on par with other industries and to establish a clear framework for cryptocurrency taxation. The standard capital gains tax rate in the country is 28%.
Although the draft budget figures have not yet been approved by the Portuguese parliament, the proposal is consistent with what the country’s Minister of Finance, Fernando Medina, stated in May: crypto would soon be subject to the country’s capital gains tax laws.
At least one of the reasons for Portugal’s changing demographics is cryptocurrency. The country is home to what some refer to as “Bitcoin Beach” in Meia Praia, an unofficial gathering place for cryptocurrency enthusiasts who have relocated to avoid cryptocurrency taxes in Italy and France.
If Monday’s draft budget is approved, it will be interesting to see how the new policies affect Portugal’s crypto economy—and whether it will face an exodus like India, as companies and investors flee to lower-tax countries.
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