Portugal announces 28% capital tax on cryptocurrency gains

The country's finance minister announced on Friday that crypto will soon be subject to a 28% capital gains tax.

Portugal crypto tax
Portugal | Image: Immigrant Invest

According to Portuguese news outlet ECO, Minister of Finance Fernando Medina said on Friday before a full sitting of Portugal's parliament that crypto assets will soon be subject to capital gains taxes.

The declaration marks a significant shift in Portugal's approach toward cryptocurrencies.

Since 2018, the country has treated cryptocurrency trading as a money exchange rather than an investment, exempting crypto from the country's current capital gains tax of 28 percent.

Portugal has developed a reputation as one of the most desirable crypto tax havens in the world, because to its 0% effective tax rate. Lisbon, the capital, has become a global crypto centre in part as a result of this.

On Friday, Portuguese officials did not characterize this significant shift in the country's approach toward crypto as a departure from any previously pro-business stance.

Instead, lawmakers said that Portugal has always intended to regulate cryptocurrency and that they have been closely monitoring how other nations have altered their legislation to inform their own policy decisions.

Medina told parliament on Friday,

“It is an area in which there is a lot more knowledge and a lot more progress, so that Portugal can drink from international experiences.”

Many jurisdictions are already classifying cryptocurrency revenues as capital gains. Consumers who have neglected to disclose taxable revenues from the sale of cryptocurrencies and NFTs received a warning from Australia's tax department this morning.