Portugal, one of the countries that is considered a tax haven for cryptocurrencies due to the lack of taxes associated with cryptocurrencies, is preparing to change this policy. Fernando Medina, Portugal’s Finance Minister, stated that the country is working on a framework to allow crypto income gains to be taxed according to the principles of “fairness” and “efficiency,” and declared that there can be no gaps for any income gains that can be obtained without taxation.
Portugal tightens cryptocurrency tax policy
Portugal, one of the countries that has been promoted as a crypto haven due to the absence of taxes in this regard, is working on creating laws that will allow it to tax these digital assets. Statements on this topic by the country’s Minister of Finance, Fernando Medina, during a discussion of the state budget.
Many countries are building their models on this and we are going to build our own. I don’t want to commit myself to a date at this moment, but we will adapt our legislation and our taxes.
The government has already given indications of its future direction regarding taxation of cryptocurrencies. The Ministry of Finance has asked the Portuguese Tax Agency to study how to tax crypto assets in other regions in 2021 “in order to propose an appropriate tax framework for these new instruments, taking into account the necessary balance between an equitable distribution of income and wealth and the attraction of foreign investment.”
Models not decided yet
While the models by which crypto gains will be taxed remain unclear, Medina stated that they will be set up according to the principles of “fairness” and “efficiency,” with the goal of a tax system that does not scare away crypto investments abroad. City declared that this system should make taxes “appropriate”, but not “of an exceptional nature that ends up reducing revenue to zero, which is in fact contrary to the purpose for which they exist”.
However, he was firm in his belief that cryptocurrency should eventually be taxed, stating that there can be no “gaps that lead to capital gains in relation to non-taxable asset transactions.”
Recently, cryptocurrencies began to be used as a means of payment in real estate transactions in Portugal. On May 8, the first transaction of this kind in the country was reported, when an apartment in Braga was sold for 3 bitcoins.
What do you think of the statements regarding taxation of cryptocurrencies made by the Portuguese Finance Minister? Tell us in the comments section below.
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