Until recently, Portugal, as a country that does not tax crypto, was the preferred business and residential destination for many crypto-related professionals.
But now these benefits seem to be gone.
The government of Portugal proposed a 28% income tax on cryptocurrencies in its 2023 budget draft.
The tax would apply only to cryptocurrencies Owned for less than A Year, with gains from crypto held for longer than that period of time still exempt.
Free crypto transactions would also be taxed, and a 4% rate would apply to commissions charged by intermediaries.
The budget is still subject to discussions and approval within the Parliament in the coming weeks.
Given that the ruling party (PS) has an absolute majority, it has the power to single-handedly see it through.
Earlier that month, Fernando Medina, Portugal's minister of finance, declared his commitment to start taxing crypto, stating that the government would work on the regulatory framework.
Portugal is not advanced country among EU countries that doesn't have any clearly developed industry. Recently with relatively less strict crypto-releated regulation and business environment, many crypto workers moved into this area and hold business events or annual crypto conferences.
Even though Crypto could be one of high profit source for the nation's future, it may be difficult for Portugal to apply independt policy that would not aligned with global and EU guideline.
This taxation seems to be very small in a small european country, but one of milestone to give some ideas for other countries' crypto policy framework.
It may not discourage crypto sector, make traders and exchages more careful within regulation boundary. Still there are many variation, nothing clearly decided yet.