- According to the new draft policy, the Portuguese must pay taxes on all profits derived from cryptocurrency trading.
- 28% levy fee must be paid on profits from digital assets.
Portuguese legislation attempts to introduce a crypto taxation policy in its 2023 budget plan. The draft budget was awaiting government approval to help the nation embrace the world of crypto. Currently, the country does not have a specific type of levy on users’ crypto earnings.
With growing interest in cryptocurrencies, Portuguese legislation has decided to introduce new guidelines to pay tax on crypto earnings that are held for less than a year. Policy makers are turning to digital currency as there is a continuous demand for cryptocurrency in the country.
The European nation of Portugal intends to impose new regulations on a 28% tax on profits from crypto assets held by users within a year. Until now, the European nation had no specific regulations on profits from digital assets, except on corporate platforms and professional business entities.
On top of that, the government has decided to impose a 10% tax on the free trade of digital currencies. A 4% tax will be levied on intermediary agents who charge for crypto transactions. The proposed draft rules will also be applicable to other European countries that have yet to introduce crypto asset levy fees, including Germany.
Policymakers believe the new policy will also support miners, who are currently facing a huge crisis due to heat waves and low electricity availability in the country.
At a press conference held in Lisbon, the Secretary of State for Fiscal Affairs said that “It’s a regime that fits into our tax system and also into what is done in the rest of Europe.”
Not only Portugal, but many other countries like South Korea and India are moving towards implementing some kind of regimes on crypto investors.
Recently, South Korea seized US$184 million worth of digital assets due to non-payment of taxes by investors. For about two years, the country collected 260 billion won due to unpaid taxes.
The nation therefore took the initiative to impose a 20% tax on digital assets at the start of 2022. Later, the government picked up the slack due to a negative response from investors.