Crypto-friendly country Portugal is planning to impose taxes on crypto gains held for less than a year after the acquisition, following the footsteps of South Korea, which wants to implement taxes on cryptocurrencies received as gifts.
Portugal Will Start Taxing Crypto Gains Next Year
The country, often described as a crypto tax haven by investors, is about to change its stance on the taxation of virtual assets with the introduction of the tax rules next year.
According to a new budget draft submitted to the Parliament by its Finance Minister Fernando Medina, the country will place a 28% tax on all incomes generated from digital assets starting in 2023.
If the budget is approved, the Portuguese crypto traders must report their earnings and pay 28% taxes on all crypto gains held in less than 365 days, joining the likes of India and Japan. However, investors are not required to pay taxes on assets held above the slated period.
Currently, the Portuguese government only requires businesses and professionals who engage with cryptocurrencies to comply with the tax rules guiding corporate entities in the region.
As one of the crypto-friendly nations worldwide, the proposed budget does not only make provisions for implementing taxes on crypto gains, part of the bill includes plans to impose 10% taxes on digital assets transferred to other users freely without charges. Similarly, the government plans to introduce a 4% on commissions charged by brokers to process crypto transactions.
Portugal Seeks to Provide Specific Outline for Crypto
In addition to the proposed taxation on digital assets, the country plans to tax profits generated from the mining and issuance of cryptocurrencies. While the draft is subject to complete legislative procedures before approval, all regional crypto activities will be subjected to taxes.
Last year, the finance minister hinted that cryptocurrencies would soon be subjected to taxation, noting that many nations already have a model designed for the emerging economy and Portugal will not be left out.
In light of this, the drafted budget seeks to introduce an outline that allows the country to have a comprehensive regulatory framework that would significantly impact the use and adoption of the asset class.
