Portugal Makes Bitcoin Trading and Other Crypto Transactions Absolutely Tax-Free
It’s a big news coming from the European nation of Portugal as it decides to exempt cryptocurrencies from levying any taxes. Last week, the Portuguese Tax and Customs Authority confirmed that any type of cryptocurrency transactions and payments shall be exempted from Value Added Tax (VAT).
In an official ruling document, the regulator was providing a clarification to a crypto mining company. In the document the Portuguese Tax authority writes that exchanging digital currencies for fiat money (and vice versa) is absolutely free from any tax. Moreover, cryptocurrency users won’t have to pay any additional income tax.
Portugal has always had a friendly approach with taxation to cryptocurrencies. While referring to a 2012 crypto paper released by the ECB, the Central bank of Portugal, the Banco de Portugal made its first announcement in 2013 for expecting cryptocurrencies from any taxes. Later, another document published in 2016 mentioned that earnings derived from the sale of digital currencies in Portugal won’t be liable to any taxation.
Portuguese business newspaper Jornal de Negócios mentioned that the latest news was disclosed by the Portuguese Tax Authority based on the request by a crypto mining company seeking more details about taxation laws. The Portuguese Tax Authority said: “An exchange of cryptocurrency for ‘real’ currency constitutes an on-demand, VAT-free exercise of services.”
Note that this time the PTA has only lifted the VAT from transacting in cryptocurrencies or getting any payments in digital assets. However, the capital gains taxes will still continue to exist in the range between 28 percent to 35 percent.
Well, this news comes at a time when regulatory bodies across the globe are having a strict control over crypto taxation.
On the other hand, the Ministry of Economy of Kyrgyzstan has proposed new tax law on crypto mining activities in the country. Back in 2014, the Kyrgyz Republic had issued a report call digital currencies as illegal under it national law.
Thus the introduction of the new taxes rather comes as a friendly measure as the country plans to increase its revenue while simultaneously allowing crypto use for its citizens.