Portugal wants to tax short-term cryptocurrency earnings from next year: Report

Portugal’s policy shift from not taxing cryptocurrency to charging cryptocurrency will enter another chapter as policy makers look to holders of crypto assets in the short term.

The government is planning another form of cryptocurrency tax that will expand its existing tax policy for cryptocurrency.

Portugal to tax short-term crypto profits by 28%

According to Bloomberg, the Portuguese government is pressing ahead with its plans to tax profits on cryptocurrencies that the population has held for less than a year. This is part of the proposals included in the state budget for 2023. The move will see a tax of 28% on earnings from cryptocurrencies held for less than 12 months.

This proposed law would represent a major shift in Portugal’s policy when it comes to taxing cryptocurrencies. Previously, the state only taxed digital assets acquired from professional or commercial sources. Holding cryptocurrencies for an extended period of time is not a taxable event.

Now anyone who profits from selling cryptocurrencies held for less than a year will be liable to pay taxes. However, crypto assets held for longer than a year are still exempt from any tax burden.

The budget proposal also stated that free cryptocurrency transfers would be taxed at 10%, while commissions charged to brokers on such transactions would be taxed at 4%. In addition, the issuance of cryptocurrency and mining may also be subject to taxable income.

The Portuguese government said the proposed incoming rules followed similar crypto policies in other European countries, which do not tax year-round holdings of cryptocurrency. According to a statement from Portugal’s Minister of State for Finance Antonio Mendonca Mendes:

“It’s a system that fits our tax system and also with what is done in the rest of Europe.”

Latest Cryptocurrency Tax Summary

The proposal is before the country’s parliament and will need to be approved before it becomes law. The latest development comes shortly after Portuguese Finance Minister Fernando Medina revealed that the country plans to implement a capital gains tax on cryptocurrencies.

However, the Portuguese Congress later rejected such proposals made by two political groups.

There has been an increased focus on cryptocurrency taxes lately. India has imposed a 30% capital gains tax on holdings and transfers of digital assets, along with a 1% tax deductible at source (TDS) on all crypto transactions. However, crypto exchanges in the country suffered a sharp drop in their trading volumes as a result of the draconian crypto policy.

Conversely, South Korea has postponed its plans to impose a 20% tax on crypto earnings until 2025.

Portuguese publication wants to tax short-term cryptocurrency earnings from next year: report first appeared on CryptoPotato.

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