Lisbon, the other crypto capital after Zug in Switzerland? Nothing is less sure. Behind the sun, the more affordable cost of living and the well-represented community in virtual currencies, Portugal has just taken another step towards a change in its cryptocurrency taxation that will not please many. Small warning nevertheless: read the article well until the end. The Portuguese plan is rather interesting and France should perhaps take inspiration from it.
End of the cryptocurrency exemption in Portugal
Previously tax-exempt, crypto winnings will soon be subject to a 28% tax. As a reminder, in France, gains are subject to the flat tax and its 30% tax, which also concerns gains in stock market investments in particular.
The new rule was submitted by the Parliament located in Lisbon, during discussions around the budget plan for next year. Parliamentarians still have to approve it, but already, the Secretary of State for Fiscal Affairs António Mendonça Mendes said during a conference that the new regime “integrates with our tax system and also with what is done in the rest of Europe”.
Exemption still possible for long-term investment
All is not all black that said. Portugal may come closer to what France is also doing, the new tax plan will make the difference between two types of investment. On the one hand, purchases and resales of crypto-currencies less than a year old, and on the other, purchases and resales of more than a year. The second scenario will continue to exempt investors. This distinction is not new in Europe. Our neighbors in Germany have come up with the same system.
The goal is therefore to charge investors who would seek to generate real income with crypto-currencies, unlike others who see their purchase more as savings, or who use their crypto-currencies in the context of cryptography ( without reconverting their holdings into fiat currencies). For professionals, nothing seems to change, they will continue to be subject to taxation on earnings.
The cost, in Portugal, to buy crypto-currencies could increase a little on the other hand. The new plan proposed to Parliament also includes a 10% tax on free cryptocurrency transfers, and 4% on commissions collected by cryptocurrency trading platforms.
Tax benefits in Portugal
As Bloomberg recalls, the country counted more than 555,000 foreign residents last year and some of them are already benefiting from a tax reduction compared to France in particular, and to the classic regime for a Portuguese citizen.
In 2012, Lisbon had implemented a “golden visa”, with a whole bunch of advantages which included tax exemptions (tax exemption for ten years). The scheme was stopped in 2020. Since then, it remains possible to access reductions to pay only 10% tax as a non-habitual resident.