Portugal's parliament has rejected two bills, submitted by the Livre and Bloco de Esquerda parties, to tax and regulate cryptocurrency transactions.
Portugal, which has been considering taxing cryptocurrency transactions, has voted against two regulatory proposals to this end.
The economic daily ECO has reported that Portuguese lawmakers they rejected this Wednesday the regulatory proposals presented by the Livre party and the Bloco de Esquerda party.
According to the report, the Portuguese government was considering introducing a tax obligation on cryptocurrency transactions, to tax capital gains from a threshold of €5.000.
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Portugal will not tax cryptocurrencies
However, in the debate on Wednesday on the State Budget for 2022, parliamentarians in the Assembly of the Republic voted against Livre's tax proposal.
They also rejected the bill proposed by the Left Bloc party, which sought to extend the Personal Income Tax (IRS) to cryptocurrencies, to end the tax haven status that the country has for owners and investors of these assets.
Like Livre, Bloco de Esquerda MPs want to accommodate cryptocurrencies such as Bitcoin, which are highly popular in the country, into Portugal's tax regulatory framework, in order to tax capital gains from the sale of these digital assets.
Portugal's Tax Haven Status for Crypto
Portugal is one of the few countries that still does not tax cryptocurrencies, which is why it is considered a tax haven for this emerging asset class.
However, given the growing adoption of cryptocurrencies, which have proliferated as means of payment and investment assets, the government said it is working to mitigate legal loopholes and gaps to provide regulatory clarity to the crypto industry.
Portugal is seen as one of the most investor-friendly countries for cryptocurrencies, although it is not known how long the current tax haven status will last.
Fernando Medina, the finance minister, said in the middle of this month that the Portuguese government intends to legislate on this issue and, although he did not commit to a timeline for taxing crypto assets, he did indicate that this would be as soon as possible. This suggests that the taxation of cryptocurrencies is an issue that will still be on the table for legislators.
Paying for real estate with Bitcoin
Earlier this month, the real estate company Zome was involved in the first official sale of a property paid for in Bitcoin, without conversion to the euro, in the city of Braga. It was a T3 apartment that was paid for directly in the cryptocurrency.
Neither the property owners nor the real estate agents had to convert the bitcoins paid by the investor into euros. This was thanks to the new regulations adopted by the country's Notary Order (ON), which allow real estate investors to use their crypto assets to carry out transactions in the real estate market directly.
The regulation was approved last April, with the aim of further promoting the adoption of cryptocurrencies in Portugal and addressing the growing demand from real estate investors, who are looking to further expand the utility of their digital assets.
The new regulation adopted by the ON allows investors and real estate agents to trade purely in Bitcoin. Before the implementation of these new rules, investors had to convert their cryptocurrencies to euros, in order to pay with fiat currency when buying and selling a property.
Continue reading: Portugal allows real estate payments in cryptocurrencies