Portuguese Tax Authority announces it won’t tax cryptocurrency
The Portuguese Tax Authority (PTA) has officially announced that Bitcoin and other cryptocurrencies will not be taxed in Portugal. The PTA revealed the news in response to a request for more information from a company interested in mining cryptocurrency.
This means that individuals won’t have to pay capital gain taxes or VAT when buying or selling cryptocurrencies.
The PTA is quoted as saying: “An exchange of cryptocurrency for ‘real’ currency constitutes an on-demand, VAT-free exercise of services.”
It goes on to add that no income tax has to be paid by individuals using cryptocurrencies either.
The PTA had previously stated that trading cryptocurrencies or receiving payments in cryptocurrencies will not be a taxable event (no income tax), but companies will need to pay capital gains tax (between 28% and 35%).
For individuals who want to trade and hold cryptocurrencies, this makes Portugal an ideal place to be. Whereas most countries regulating the virtual currencies are, in fact, taxing Bitcoin transactions, the Portuguese courts and fiscal system have expressed an understanding of the lack of connection between the fiduciary and cryptographic way of minting currency.
However, it’s important to underline businesses using cryptocurrencies do have to pay the same taxes, like VAT, Social Security or income taxes, independently of the underlying payment method.
Even though this seems like brilliant news, many have warned of the events that could occur in the near future. Some believe that this is simply a marketing stunt to increase cryptocurrency trade in order to tax them in the future. However, an optimist would see this as the Portuguese Tax Authority possibly trying to attract new businesses to the country.