Is Portugal Crypto Friendly

Beginners Guide to Portugal Crypto Taxes

Is Crypto really tax-free in Portugal? Why are so many people that are into crypto moving across to Portugal? In this post, we’ll answer these questions, as well as all you need to know about crypto taxes in Portugal.

Beginners Guide to Portugal Crypto Taxes

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Is Crypto Tax-Free in Portugal?

Yes, cryptocurrency is tax-free in Portugal, and it’s not taxed because it’s not regulated. It’s not that there’s a law that says Portugal doesn’t tax crypto because it is not regulated; it’s just not considered a taxable asset. This means that any gains you make in relation to the sale or trade of cryptocurrencies are not taxed.

However, if you trade cryptocurrency as a primary source of income, or your company is a cryptocurrency, you will be taxed on capital gains.

Crypto Taxes Q&A

The below list of questions was put to a crypto tax expert, Maria from Map Advogados.

Will Portugal start taxing crypto in the future?

It is unlikely that anything will change in the next 4 years. In January 2022, Portugal held a parliamentary election. At the time, members of the left party asked if they were going to tax crypto while discussing the budget. The government that will be standing in Portugal for the next 4 years stated that “for now, we are not”.

They went on to state that they have been doing a study and only when that study is complete will they think about all the possibilities and decide what they are going to do”. The same member of the left party submitted a motion to tax crypto, and every party rejected that motion.  

Will Portugal try to capitalize on crypto?

In Portugal, there are a lot of people entering the country, who are wealthy and who buy properties at a higher value. When you buy a property at a higher value, in Portugal, you pay stamp tax and transmission tax. The transmission tax is progressive. The higher the price of the property, the higher the tax. So the government are simply enjoying their transmission tax on property as a result of more people coming into the country.

If they tax crypto, those who want to move to Portugal and buy properties will go elsewhere. Then the government will only deal with the Portuguese, that don’t invest much into crypto.

Could the rise in the crypto community inflate prices and drive out local people?

Portugal is a country that welcomes everyone; it doesn’t matter if you’re wealthy or poor. The Portuguese, over the years, have also emigrated all over the world.

Of course, the prices will go higher, but so will the economy and jobs, so it helps a lot. It also helps to grow the economy and grows the country.

If Portugal starts to tax crypto, could they claim on past movements or trades?

If crypto is eventually taxed, it is likely it will always be from that moment on. The Constitution doesn’t allow you to tax the past movements in Portugal. They also don’t tax gold or tax stocks.

First, they don’t have that cultural aspect of going after citizens to see their taxes. If you fill in your tax returns and you say, this is what you have, they believe you. That’s what you have. They are not going to check it. Only, of course, if they do a random analysis, but they’ll check, like in other countries, that they go after the contributor. That’s not Portugal.

Also, they don’t have enough manpower. Therefore, they don’t have that knowledge yet. Because it’s not a crypto country, it’s not likely to be going to be needed for many years. You have to make a law to consider how and when, and if they are going to tax you. And that’s not even up to debate.

Do you need to report or file your crypto taxes in Portugal?

If the only thing you have to declare is crypto, crypto is not declared. Therefore you do not need to do any crypto reporting or filing.

However, if your company is crypto, you will need to convert your crypto into euros because it is a company.

Are profits from crypto staking taxed in Portugal?

It doesn’t matter if you’re yielding, staking or farming because it’s your own personal investment into crypto. So it doesn’t matter whether or not you’re doing well trading, so to speak, as long as it’s not your company and you’re not a day trader as a job.

Are you taxed in Portugal if your only income is crypto?

That’s not income. Income is tax, but that’s not income. Income is when you work for somebody else. When you do a service for somebody that’s income. This is your own personal investment into crypto.

Do you need to trade on a Portuguese cryptocurrency exchange?

You can use any crypto exchange, regardless of its location.

However, if you become a Portuguese resident and you want to take advantage of not paying taxes in Portugal, change your address in exchange. You will also need to work with your Portuguese bank, so you don’t confuse your previous tax residency.

Crypto-friendly banks in Portugal

When it comes to being crypto-friendly, all Portuguese banks should be. The only thing they say is that crypto is volatile and to be aware you are on your own when you invest in crypto.

Of course, there are some that may be out of ignorance and have some concerns, but that’s all adjustable. When you have an attorney or a lawyer that can help you through the process, either for the residency or the setting up of the bank account. You can always know what your expectations are.

Is there a maximum amount of crypto you can cash out in Portugal?

There are no limits in terms of cashing out of crypto in Portugal. The only limits that may be in place are set by the cryptocurrency exchanges, where you may be restricted by daily withdrawal limits.

Of course, it’s important to provide your bank with a heads up that you are cashing out some crypto from your own personal investments.

In Portugal, can you get a mortgage based on crypto holdings?

If you want to get a mortgage and only do crypto, then you cant use that as proof. You could have 10 million euros in crypto but still not get a mortgage. This is because they still want salary slips and tax returns.

However, because crypto is tax-free in Portugal, you could cash out your crypto and buy a property that way.

Can you buy a property with crypto in Portugal?

Yes, you can buy a property with crypto in Portugal. It’s like you’re trading in assets where the seller says, okay, I’ll consider that Bitcoin the same value as my property, and then you switch and trade the 2 assets with the help of an attorney.

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