Cryptocurrency in Portugal

Exploring Portugal’s Crypto Sectors

The government of Portugal has introduced several incentives over the years, and as a result, cryptocurrency traders and miners may now take advantage of the country’s crypto-friendly atmosphere. Earnings made with crypto in the nation are not subject to value-added tax, and businesses that deal in cryptocurrencies have fewer legal and regulatory restrictions than in other countries.

• Taxation Rules

According to a notice issued by the Portuguese tax authorities in 2016 and still in force today, Portugal is one of the few countries in Europe where transactions involving cryptocurrencies are not subject to taxation.

Since the Portuguese tax office recognizes that cryptocurrencies cannot properly be categorized as “currencies” or “financial assets,” it does not include their returns inside capital profits or financial gains. In the absence of a clear and precise rule regarding the taxation of cryptocurrencies, Portugal is a “tax-free” location for selling cryptocurrencies.

Depending on the kind of activity you engage in, the profits you make from buying and selling cryptocurrencies are not subject to taxation. Nonetheless, it is important to mention that companies that offer services connected to cryptocurrencies, on the other hand, are subject to a rate of taxation on capital gains that ranges from 28 to 35 %.

• Exploring Portugal’s Crypto Developments

In April 2020, Portugal also adopted a “Digital Transitional Action Plan” to promote digitalization. With this strategy, the government announced that it would offer the essential environment for corporate innovation and digital transformation. The concept calls for establishing “Technological Free Zones” to promote experimentation in blockchain and other sectors.

As a result of the growing crypto community in Portugal, the nation has been selected to serve as the venue for a significant number of events. The Ethereum Conference was held in Lisbon in October of 2021, and the city is following the worldwide trend of NFTs by hosting Europe’s first crypto art festival, Rare Effect, in May of 2021.

Furthermore, in October of 2021, Criptoloja became the first cryptocurrency exchange in Portugal to be granted permission to do business by the country’s central bank. Thanks to the enterprise, individuals can now use euros to purchase more than 90 different cryptocurrencies.

So far, the Bank of Portugal has authorized several investing and transaction platforms for virtual assets. Amongst them, these three are the most prominent examples: Cryptoloja, which is headquartered in Estoril and operates under the name Smart Token, Guimardes & Matosa, which is based in Braga and operates under the name Mind The Coin, and Luso Digital Assets, which is situated in Funchal, Madeira. In addition to offering exchange services for virtual assets and fiat currencies, it was permitted to transfer virtual assets like “cryptographic keys.”