Portugal’s parliament today rejected a plan to tax Bitcoin and other cryptocurrencies. During a Wednesday evening budget debate, the left-wing parties Bloco de Esquerda and Livre proposed taxing digital assets, but the proposal was defeated. According to the proposal, the government should look into taxing bitcoin earnings exceeding €5,000 ($5,340.45). The days of a tax-free crypto-Portugal, though, may be numbered. The Socialist Party, which currently has a majority in the legislature, has yet to introduce legislation. Despite this, there is a risk that Portugal will no longer exempt cryptocurrencies from taxation shortly. Portugal has long been considered a bitcoin tax haven, with revenues from individual cryptocurrency sales being tax-free since 2018. Compared to the current capital gains tax rate of 28% on financial assets, Portugal’s effective capital gains rate on cryptocurrency is 0%. Furthermore, digital trading assets are not considered investment income in the European country. As a result, even though enterprises who accept bitcoin must pay income tax on their earnings, crypto-companies and events flock to Lisbon. Portuguese Minister of Finance However, that may be coming to an end. According to Fernando Medina, the Portuguese Minister of Finance, cryptocurrencies will be subject to capital gains taxes shortly. Digital assets may be subject to value-added tax (VAT), stamp fees, or property taxes imposed by Portugal’...
