Portugal wants to tax cryptocurrencies at 28%

28% is expected to be cryptocurrency tax in Portugal. Everyone who has a profit on cryptocurrencies held for less than a year is expected to pay. On the one hand, it is an impact on those who earn on trading cryptocurrencies, but on the other hand, it is an incentive to invest for a longer period.

The Portuguese government has just come up with this idea. However, he still has to go through the entire legislative process, so it is possible that the original plan will be evolving. However, the plans are ambitious: the new law is to be introduced as early as 2023. Looking at the pace of tax changes in Poland, the deadline seems impossible to meet, but the Portuguese swear that they will make it.

Cryptocurrency Tax Changes in Portugal

Bloomberg was the first to announce work on changes in the cryptocurrency tax in Portugal. All those who earn on cryptocurrencies held for less than 12 months are to be charged with the tax. And they will jointly and severally pay 28% of the profit earned on tokens bought and sold during the year. 

If the new law comes into force, it will be a huge change in relation to the policy created for years, which was clearly assessed as friendly to cryptocurrency owners. The tax was paid only by business and professional clients. Individual investors could get rich on crypto at will, with no extra tax. 

Interestingly, people who have owned cryptocurrencies for less than a year will pay a tax of 28%, but those who buy and sell them after 366 days will not pay tribute to the state at all. 

Taxes even for free transactions?

Even more interesting things can be found in Portugal's draft budget for 2023. It turns out that even ... free cryptocurrency transactions are planned to be taxed. You will pay 10% tax for them, and all brokers and companies that charge a commission on such transactions will pay 4% tax. 

Income tax is also planned to cover the issue and mining of cryptocurrencies. 

When is the cryptocurrency tax in Portugal?

However, the government's proposal still has to go through several legislative levels. Parliament will look at it first, and it may, of course, introduce its amendments. And it is by no means a foregone conclusion that she will reject it entirely. The Portuguese Congress has already rejected projects previously prepared by political groups.

In recent weeks, however, Portugal's Finance Minister, Fernando Medina, has repeatedly said that Portugal will be introducing a tax on capital gains from trading cryptocurrencies. Other countries are also following this path.

Taxes on cryptocurrencies in Poland and abroad

India even introduced a 30% tax not only on capital gains made on cryptocurrencies, but also on their transfers. It is worth remembering that 1% of tax is deducted beforehand on all cryptocurrency transactions. Unfortunately, this has had an impact on the popularity of cryptocurrencies in India. All native Cryptocurrency exchanges have significant declines in turnover. 

READ: India wants to introduce e-rupee

South Korea was considering a similar move, but the decision was postponed until 2025. Previously, it was planned to introduce a 20% tax on cryptocurrencies, but it was decided that it was better to look at the market even more than to make hasty decisions. 

Let us remind you that in Poland you pay the tax on profits from cryptocurrencies in the same way as, for example, on profits on the stock exchange. The so-called Belka tax is 19% of the obtained income, less the costs of obtaining it. Bottom-up efforts to bear this burden have been going on for years, but despite many appeals from the financial circles, it does not seem to be liquidated.