Portugal Finance Minister Mulls Imposing Tax on Crypto Income

Portugal Finance Minister Mulls Imposing Tax on Crypto Income

The Finance Minister of Portugal is considering imposing tax on crypto income. Portugal is one of the countries considered a crypto tax haven due to absence of crypto taxation. However, the Ministry of Finance is preparing to change this policy. Fernando Medina, Minister of Finance of Portugal, stated that the country is working on a framework to enable the taxation of cryptocurrency income gains following the principles of “justice” and “efficiency,” and declared that there cannot be gaps for any income gains to be obtained without taxation.

Portugal to Approve Cryptocurrency Taxation Policy

Portugal is one of the countries that has established itself as a crypto haven due to the absence of taxation policy. It is working on the framework to adopt laws that will allow it to tax these digital assets. The statements were made by the Minister of Finance, Fernando Medina, during a state budget discussion. Medina explained:

"Several countries are building their models regarding this matter and we are going to build ours. I do not want to commit myself to a date at this moment, but we will adapt our legislation and our taxation."

The government had already given signs of its future direction regarding cryptocurrency taxation. The Ministry of Finance asked the Portuguese Tax Authority to study how crypto assets were taxed in other regions in 2021 “in order to propose an adequate tax framework for these new instruments, taking into account the necessary balance between the fair distribution of income and wealth and the attraction of foreign investment.”

Taxation Model Still Not Decided

While the models by which cryptocurrency gains will be taxed are still unclear, Medina stated that these would be set up following the principles of “justice” and “efficiency,” aiming for a tax system that would not scare cryptocurrency investments out of the country. Medina declared this system should make taxation “adequate,” but not of an “exceptional character that ends up reducing revenue to zero, which is contrary, in fact, to the objective for which it exists.”

However, he was firm in the belief that cryptocurrency should be taxed eventually, stating that there cannot be “gaps that cause there to be capital gains about the transaction of assets that do not have a tax.”

Recently, cryptocurrencies are starting to be used as a means of payment in real estate transactions in Portugal. On May 8, the reported first transaction of this kind happened in the country, when an apartment in Braga was sold for 3 BTC.