For a long time now, many have considered Portugal to be one of the friendliest crypto countries in the world. Not only has it introduced various rules that make it so much easier for people to not just trade cryptocurrencies but also to use them.
However, for what came as a shocking surprise to many, Portugal has announced its intention to start taxing gains that people make on their crypto investments. According to the detailed report, the major policy shift will only be looking to tax tokens that someone has purchased and held on to for less than 365 days.
It is also important to make the distinction that Portugal already has specific rules on taxing cryptocurrencies. More specifically, they will only tax cryptocurrencies that are used for business or professional activities. However, that is all soon to change.
A Taxation Rate as High as 28%
Portugal has made it very clear that it will be taxing specific cryptocurrencies in various portfolios. More specifically, they are specifically looking for cryptocurrencies bought and held for less than a year,
If an investor has such an asset in their portfolio, they can pay as much as 28% in taxes on the current amount that they hold. Fortunately, investors who have assets that are older than a year will not be subject to any taxes. But given how unpredictable the market has been, it is also very unlikely that this rule will not be amended.
Still Waiting on Approval from Parliament
While Portugal did submit a draft to the public, essentially explaining what they would be taxing and by how much. However, the draft budget still has to go through parliament, as the bloc that is responsible for this will still need confirmation from them.
Therefore, it is still very likely that a taxable rate of over 28% is simply not a good option for new investors. Furthermore, this new bill will also see the mining operations and issuing crypto as taxable income. For these types of income, investors will have to pay 10% in case it is a free transfer of crypto.
But if the investor has bought the cryptocurrencies through a broker, they will also be charged 4% on the commissions that they paid their broker.
The Regime Change Fits Their Current Goals
Portugal has been of the friendliest countries in the world for cryptocurrencies since its lack of legislation which combines well with the affordable living standard. Therefore, the country has very famously attracted plenty of cryptocurrency companies.
In the most recent press release, Portuguese lawmakers clarified that these changes fit into the newest taxation system that will eventually make its way all around Europe.