After the end of the year, Portugal may cease to be a tax haven for crypto investors as it will no longer be a tax haven. According to Monday’s report, the Portuguese government proposed a new cryptocurrency taxes policy. It would be part of the national budget for 2023.
A small section of the almost 450-page macroeconomic strategy report and fiscal policy document states that the Portuguese government will impose 28% capital gains taxes on cryptocurrency gains within one year. Gains made within one year of acquiring crypto assets will be exempted from this tax.
Portugal’s government will also impose a tax of 4% on all crypto transfers that are free and will also impose stamp duties where appropriate.
This proposal aims to treat crypto as an industry equal and to create a framework for crypto taxation. Back in May: That crypto would soon be subjected to capital gains tax laws.
Portugal has been a popular destination for international visitors over the past decade. This is due to its flexible visa and immigration options, as well as its affordability.
According to data from the European Commission, Portugal experienced a huge 40% increase in immigration between 2011 and 2021. In 2021, approximately 5.4% of Portugal’s total population of 10 million were non-citizens.
At least one reason for Portugal’s changing demographics is cryptocurrency. Meia Praia is home to the “Bitcoin Beach. This unofficial gathering spot for crypto enthusiasts who moved to Portugal to avoid paying tax in Italy or France on cryptocurrency, is a popular tourist attraction.
In April, the country also issued its first cryptocurrency banking license.
Although the Portuguese Parliament rejected a Bitcoin tax measure earlier in the year, the administration appears to not have abandoned taxing crypto.
It remains to be seen if Monday’s budget draft is approved. If it is, it will also be possible to see how the new policies will impact Portugal’s crypto economy. And if it will experience an exodus like India as investors and companies flee to lower-tax countries.