Portugal is considering the possibility of imposing taxes on crypto gains.
Portugal’s government submitted a 2023 budget draft, which among other things, offers to implement a 28% tax on crypto gains.
According to the 2023 State Budget shared on October 10th, the tax would affect investors' capital gains made within a year. Gains acquired after a year of holding cryptocurrency will be exempted. The proposal reads:
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Capital gains relating to crypto-assets held for a period of less than one year are subject to the rate of 28% (without prejudice to the aggregation option), with the capital gains referring to crypto assets held for more than 365 days exempt from taxation.
The proposal notes that crypto mining and issuance of cryptocurrencies will be considered income and, therefore, subject to taxes.
Based on the proposal, the Portuguese government aims to treat cryptocurrencies as other industries and outline a clear framework for crypto taxation. In Portugal, a 28% tax is implemented on all capital gains.
Moreover, along with crypto gain taxation, the 2023 State Budget proposes a 4% tax on crypto transfers.
With a short section in its 444-page document, the Portuguese government aims to create a “broad and adequate” framework considering crypto taxation and its classification.
Before legalization, the 2023 State Budget will have to be approved by the Portuguese parliament. It is worth noting that, in March, Secretary of State for Tax Affairs António Mendonça Mendes offered to tax crypto gains.
In April, Portugal granted its first crypto bank license to Bison Bank.
Japan is also planning to impose a 20% crypto gains taxation. The tax was initially introduced in 2021, however, faced multiple delays and is now postponed to 2025.
