{"id":448,"date":"2021-09-14T04:51:42","date_gmt":"2021-09-14T04:51:42","guid":{"rendered":"https:\/\/digitalcoinprice.com\/blog\/?p=448"},"modified":"2023-03-29T05:09:40","modified_gmt":"2023-03-29T05:09:40","slug":"pay-taxes-on-crypto-in-portugal","status":"publish","type":"post","link":"https:\/\/digitalcoinprice.com\/blog\/pay-taxes-on-crypto-in-portugal","title":{"rendered":"\u200b\u200bDo You Pay Taxes On Crypto in Portugal?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-flat ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Content<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #223c50;color:#223c50\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #223c50;color:#223c50\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/digitalcoinprice.com\/blog\/pay-taxes-on-crypto-in-portugal\/#Portugal_a_Country_Ripe_for_Innovation\" title=\"Portugal, a Country Ripe for Innovation\">Portugal, a Country Ripe for Innovation<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/digitalcoinprice.com\/blog\/pay-taxes-on-crypto-in-portugal\/#How_Do_Crypto_Taxes_Work\" title=\"How Do Crypto Taxes Work?\">How Do Crypto Taxes Work?<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/digitalcoinprice.com\/blog\/pay-taxes-on-crypto-in-portugal\/#Taxation_of_Professional_Income\" title=\"Taxation of Professional Income\">Taxation of Professional Income<\/a><\/li><li class='ez-toc-page-1'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/digitalcoinprice.com\/blog\/pay-taxes-on-crypto-in-portugal\/#Buying_Crypto_in_Portugal\" title=\"Buying Crypto in Portugal\">Buying Crypto in Portugal<\/a><\/li><\/ul><\/nav><\/div>\n<p><span style=\"font-weight: 400;\">The United States of America has taken a hard stance on cryptocurrencies, but that isn\u2019t the same across all countries in the face of the digital currency explosion. The Portuguese Tax &amp; Customs Authority (PTA) has announced investors may <\/span><a href=\"https:\/\/www.coinsmart.com\/portugal\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">buy crypto in Portugal<\/span><\/a><span style=\"font-weight: 400;\"> tax-free.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Portugal_a_Country_Ripe_for_Innovation\"><\/span>Portugal, a Country Ripe for Innovation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Portugal<\/span><span style=\"font-weight: 400;\">, a country in the member European Union, is known for its beautiful climate and beautiful Atlantic waters. However, more interestingly, the country is becoming one of the best countries for anyone involved in crypto, whether long-term investors or retail traders. As a result, statistics have shown that immigration to Portugal continues to grow, the majority being those under the age of 40, many of whom are interested in the world of digital currencies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The country of Portugal is becoming a haven for this new revolutionary technology, especially with considerations on how they are taxing their citizens. Below is an overview of how the government is currently taxing crypto.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_Do_Crypto_Taxes_Work\"><\/span><strong>How Do Crypto Taxes Work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The <\/span><a href=\"https:\/\/en.wikipedia.org\/wiki\/Law_of_Portugal\" rel=\"no-follow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">Portuguese law <\/span><\/a><span style=\"font-weight: 400;\">is very cryptocurrency-friendly, despite the complexity of innovations such as staking, lending, and decentralized Finance (Defi). Although each event is taxed differently, we can start by looking at the buying and selling of digital currencies.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Currently, individuals in Portugal who profit from the purchase and sale of cryptocurrency do not need to pay capital gains taxes. The government arrived at this decision in 2016 when the Portuguese Tax Authority analyzed the classification of cryptocurrency within types of income. They decided that selling cryptocurrencies that correspond to the individual\u2019s main recurrent activity would be the only taxable activity. Therefore, buying and selling digital currency is not subject to capital gains taxes or value-added tax (VAT). For clarification, VAT is similar to sales tax, the only difference being it is collected at every stage in the production chain. The decision made does not account for other cryptocurrency-related activities such as farming or mining.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, some exceptions do exist. Namely, the receipt of cryptocurrency when consumers buy a good or service doesn\u2019t change the tax treatment of the original transaction. Therefore, cryptocurrency dealt with in a professional or business activity may still be subject to some taxes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Therefore, Portugal will treat digital currencies like any other currency, making investors exempt from VAT and other capital gains taxes. For U.S. citizens looking for a tax haven, Portugal might still not offer any assistance. The government of the United States still takes all citizens on the world income, so a visit to Portugal will not do much for their tax bill.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Investors located in Portugal who have not been tax residents in the country for a minimum of five years can benefit from the non-habitual tax regime (NHR). Under this regime, investors may be able to monetize their cryptocurrency profits in the country and be exempt from paying capital gains taxes. To qualify, investors must be Portuguese citizens through the Golden Visa program or by being EU\/Swiss or EEA citizens. By qualifying, the NHR allows exemption on the majority of foreign-source incomes, eliminates wealth tax, and offers other special treatment on taxes in general.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under this program, investors must stay in Portugal for a minimum of 183 days each year.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Taxation_of_Professional_Income\"><\/span><strong>Taxation of Professional Income<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">It is also important to note that professional income (including <\/span><a href=\"https:\/\/www.businessinsider.com\/freelancers-email-templates-strategies-build-six-figure-careers\" rel=\"no-follow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">freelance work<\/span><\/a><span style=\"font-weight: 400;\"> or other consulting activities). To determine if it is, the individual would need to consider both the frequency and type of activity toward obtaining profits. If it is related to a professional or business activity, the individual must comply with the Code of the IRS. When a company trades cryptocurrency for profit, investors must itemize transactions on their balance sheets. This step is necessary since regulatory authorities recognize and tax based on company profits. Taxes on capital gains, in this case, maybe anywhere from 28% to 35%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The only time individuals must pay taxes is if they receive payment in cryptocurrency. In this situation, normal capital gains taxes are applicable. For these reasons, many individuals paid in cryptocurrency will avoid paying heavy capital gains taxes in the country.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In April 2020, Portugal approved what is known as a \u201cDigital Transitional Action Plan\u201d from a cryptocurrency-friendly stance. This plan intends to encourage digitization and provide the proper environment for innovation and the digital transformation of businesses. Also included in this plan is the creation of Technological Free Zones to encourage further experimentation with blockchain and digital ledger technology.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Buying_Crypto_in_Portugal\"><\/span><strong>Buying Crypto in Portugal<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">To start purchasing your first cryptocurrencies in Portugal, crypto-friendly banks, including Santander and BBVA, make it easy for users to buy and sell on crypto exchanges.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The United States of America has taken a hard stance on cryptocurrencies, but that isn\u2019t the same across all countries in the face of the digital currency explosion. The Portuguese Tax &amp; Customs Authority (PTA) has announced investors may buy crypto in Portugal tax-free. &nbsp; Portugal, a Country Ripe for Innovation Portugal, a country in [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":449,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-448","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-guide"],"_links":{"self":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/448","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/comments?post=448"}],"version-history":[{"count":4,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/448\/revisions"}],"predecessor-version":[{"id":2321,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/posts\/448\/revisions\/2321"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/media\/449"}],"wp:attachment":[{"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/media?parent=448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/categories?post=448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/digitalcoinprice.com\/blog\/wp-json\/wp\/v2\/tags?post=448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}