The Portuguese government has asked tax authorities for an “assessment” that could represent the first step towards starting to tax cryptocurrencies.
Portugal has been a haven for cryptocurrency users and investors, thanks to the little legislation and low taxes. This situation does not please the European Union, which has opted for tougher legislation, implement MiCA standards about crypto.
In Portugal, Bitcoin is regulated as any other currency, so the purchase and sale of cryptocurrencies is tax-free. However, political groups and members of the Portuguese Ministry of Finance have been Warning of cryptocurrency volatility and the need for stricter regulation.
On this issue, some officials have pointed out that it is very difficult to explain why some financial assets have tax bases of up to 28%, while cryptocurrencies do not have any tax.
Portugal has established a series of regulations with the aim of stimulate economic growthFor example, it has flexible policies for foreign investors in the real estate sector, as well as special visas for “digital nomads”, people who work remotely and do not have permanent residence.
On the other hand, many economic and financial experts have pointed out that Portugal's lax regulations could be detrimental and create a kind of bubble, similar to the one in 2007, which caused a serious global economic crisis.
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The end of Portugal's tax haven
In response to these doubts and due to pressure from the European Central Bank, the Portuguese Tax Authority, at the request of the Secretary of State for Tax Affairs, has initiated the necessary processes to create a regulatory framework for cryptocurrencies, with the aim of ending the tax haven status for cryptocurrencies.
The plan of the Portuguese authorities is to analyze the way other countries are taxing cryptocurrencies. In this way, it seeks to create a framework of regulations that tax the purchase and sale of Bitcoin, as well as the benefits obtained from any investment.
On this topic, Diogo Monica, founder of Anchorage Digital, has explained that the narrative that Portugal is losing revenue by not taxing cryptocurrencies is false and that, in reality, many companies have moved to the country due to low taxes and flexible legislation.
Although he is not in favor of imposing a tough battery of regulations, Diogo Monica does believe that there is a need for create a clear, stable and competitive regulatory framework to continue to attract companies from investors around the world.
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