Portugal to impose a 28% crypto tax from 2023
According to a Portugal tax [report](https://www.dgo.gov.pt/politicaorcamental/OrcamentodeEstado/2023/Proposta do Or%C3%A7amento/Documentos do OE/OE2023_Relatorio.pdf) released Monday, the Portuguese government has suggested a new crypto tax proposal to be exercised as part of its 2023 national budget.
Portugal has become an attractive location for foreign residents over the last decade, owing to its more flexible visa and immigration options and overall affordability.
Crypto has become one of the significant reasons for Portugal's changing demographics.
But, with the implementation of Portugal's crypto tax rules from the following year, the country is about to change its stance on the taxes of virtual assets. According to a new budget proposal submitted to Parliament by Finance Minister Fernando Medina, the country will impose a 28% tax on all crypto income beginning in 2023.
If the budget is approved, Portuguese cryptocurrency traders must report their earnings and pay 28% taxes on all crypto gains held for less than 365 days. On the other hand, investors are not required to pay taxes on assets held beyond the specified period.
Portugal has stated that the new rules are consistent with crypto legislation in other European nations, such as Germany, where investors pay zero taxes if they hold crypto for more than a year.
At a press conference, António Mendonça Mendes, The Secretary of State for Tax Affairs, stated, "It's a regime that fits into our tax system and what is being done in the rest of Europe."
Currently, the Portuguese government only requires businesses and professionals who use cryptocurrencies to follow the tax rules governing the region's corporate entities.
As one of the world's most crypto-friendly countries, the proposed budget includes provisions for implementing taxes on crypto gains and plans to impose 10% taxes on digital assets transferred to other users freely without charge. Similarly, the government intends to impose a 4% surcharge on commissions charged by brokers to process cryptocurrency transactions.
In addition to the proposed taxation of digital assets, the country intends to tax cryptocurrency mining and issuance profits. While the proposal is subject to final legislative procedures before approval, all regional cryptocurrency activities will be taxed.
Portugal to introduce a crypto regulation framework
The proposed budget seeks to introduce a framework that will allow the country to have a comprehensive regulatory framework that will significantly impact the use and adoption of cryptocurrency.
Author: Priya Kumari
Priya is a passionate content writer and the co-founder of Finendorse. She is an enthusiastic crypto investor and has a huge interest in the upcoming digitisation age.