Crypto assets are treated as intangible assets for tax purposes in Portugal. This means that they are subject to capital gains tax when they are sold or exchanged for fiat currency. The capital gains tax rate is 28%.

Crypto assets are also subject to income tax when they are used to pay for goods or services. The income tax rate is 28%.

VAT is not charged on the sale or exchange of crypto assets. However, VAT is charged on the sale of goods or services that are paid for with crypto assets. The VAT rate is 23%.

Withholding tax is not charged on the sale or exchange of crypto assets. However, withholding tax may be charged on dividends paid in crypto assets. The withholding tax rate is 28%.

Gift tax is not charged on the gift of crypto assets. However, gift tax may be charged on the gift of real estate that is paid for with crypto assets. The gift tax rate is 10%.

Inheritance tax is not charged on the inheritance of crypto assets. However, inheritance tax may be charged on the inheritance of real estate that is paid for with crypto assets. The inheritance tax rate is 10%.

Crypto assets are subject to tax reporting requirements in Portugal. Individuals who hold crypto assets worth more than EUR 5,000 must declare their crypto assets on their annual tax return.

Capital gains tax on crypto assets

Capital gains tax is a tax levied on the profits made from the sale of an asset, such as a cryptocurrency. In Portugal, the capital gains tax rate on cryptocurrency is 28%.

However, there are some exceptions to this rule. For example, if you hold a cryptocurrency for more than one year, you are eligible for a reduced capital gains tax rate of 10%.

Additionally, if you use cryptocurrency to pay for goods or services, you are not liable for capital gains tax.

It is important to note that these are just general rules, and the specific tax treatment of cryptocurrency transactions will depend on your individual circumstances. If you have any questions about capital gains tax on cryptocurrency, you should consult with a tax advisor.

IV. Income tax on crypto assets

Income tax is levied on the profits made from the sale of crypto assets. The tax rate is 28%.

For example, if you buy a Bitcoin for €10,000 and sell it for €15,000, you will have to pay income tax of €2,800 (15,000 – 10,000) * 28%.

You are also liable to pay income tax on any staking rewards or airdrops you receive.

If you hold crypto assets for more than a year, you may be eligible for a 50% discount on the capital gains tax.

For example, if you buy a Bitcoin for €10,000 and sell it for €15,000 after holding it for more than a year, you will only have to pay capital gains tax of €1,400 (15,000 – 10,000) * 28% / 2).

It is important to keep accurate records of all your crypto transactions, as you will need to provide this information to the tax authorities when filing your taxes.

VI. Withholding tax on crypto assets

When a cryptocurrency exchange or other platform that facilitates cryptocurrency transactions withholds taxes on behalf of its users, this is known as withholding tax. The amount of withholding tax that is withheld depends on the type of transaction and the jurisdiction in which it takes place. In Portugal, the following withholding taxes are applicable to cryptocurrency transactions:

• Capital gains tax of 28% on profits from the sale of cryptocurrency
• Income tax of 28% on interest earned from cryptocurrency lending
• VAT of 23% on the purchase of cryptocurrency

It is important to note that these are just the general rules, and specific circumstances may result in different tax rates being applied. For example, if a cryptocurrency exchange is located in a country that has a tax treaty with Portugal, the withholding tax rate may be lower. Additionally, if a cryptocurrency user is a resident of a country that has a tax treaty with Portugal, they may be eligible for a tax exemption or reduction.

It is important to consult with a tax advisor to determine the specific tax implications of cryptocurrency transactions in Portugal.

VII. Gift tax on crypto assets

Gift tax is a tax levied on the transfer of assets from one person to another without receiving anything in return. In Portugal, gift tax is levied at a rate of 10% on the value of the gift. However, there are certain exemptions from gift tax, such as gifts between spouses or civil partners, gifts between parents and children, and gifts up to a certain amount.

If you receive a gift of cryptocurrency, you may be liable to pay gift tax on the value of the gift. However, you may be able to claim an exemption from gift tax if the gift is from a spouse or civil partner, a parent or child, or if the value of the gift is below a certain threshold.

You should consult with a tax advisor to determine if you are liable to pay gift tax on a cryptocurrency gift and to claim any exemptions that may apply.

VIII. Inheritance tax on crypto assets

Inheritance tax is a tax levied on the transfer of assets from a deceased person to their heirs. In Portugal, inheritance tax is levied at a rate of 10% on the value of the assets transferred. However, there are certain exemptions from inheritance tax, such as:

• Assets that are inherited by a spouse or civil partner
• Assets that are inherited by children or grandchildren
• Assets that are inherited by a charity or other non-profit organization

If you are inheriting crypto assets, it is important to consult with a tax advisor to determine if you are liable for inheritance tax.

Tax reporting for crypto assets

Cryptocurrency investors in Portugal are required to report their cryptocurrency transactions to the tax authorities. The tax reporting requirements depend on the type of cryptocurrency transaction and the amount of cryptocurrency involved.

For capital gains tax purposes, cryptocurrency investors are required to report the sale of cryptocurrency assets at the fair market value of the cryptocurrency at the time of sale. The capital gains tax rate is 28%.

For income tax purposes, cryptocurrency investors are required to report any income earned from cryptocurrency mining, staking, or lending. The income tax rate is 28%.

For VAT purposes, cryptocurrency transactions are subject to VAT at the rate of 23%. However, there are some exemptions from VAT, such as for cryptocurrency transactions that are made for investment purposes.

For withholding tax purposes, cryptocurrency investors are required to withhold 28% of the gross amount of any cryptocurrency payments made to non-residents.

For gift tax purposes, cryptocurrency gifts are subject to gift tax at the rate of 10%. However, there is an exemption for gifts of cryptocurrency that are made between spouses or registered partners.

For inheritance tax purposes, cryptocurrency inheritances are subject to inheritance tax at the rate of 10%. However, there is an exemption for inheritances of cryptocurrency that are made to a spouse or registered partner.

Cryptocurrency investors in Portugal should consult with a tax advisor to ensure that they are complying with all of the relevant tax laws.

X. FAQ

Q1: What is the tax treatment of crypto assets in Portugal?

A1: Crypto assets are treated as intangible assets for tax purposes in Portugal. This means that they are subject to capital gains tax when they are sold or exchanged for other assets. The capital gains tax rate is 28%.

Q2: How is income from crypto mining taxed in Portugal?

A2: Income from crypto mining is taxed as business income in Portugal. This means that it is subject to income tax at the applicable rate. The income tax rate for individuals is 14.5% to 48%, and the income tax rate for corporations is 21%.

Q3: What are the VAT implications of crypto transactions in Portugal?

A3: Crypto transactions are subject to VAT in Portugal. The VAT rate is 23%.