In a meeting of the Portuguese Parliament on the 13th of May, Portugal’s Minister of Finance, Fernando Medina, announced the country’s intention to begin collecting taxes on cryptocurrencies like Bitcoin and Ethereum.
Portugal No Longer Crypto Haven
As a result of Portugal’s standing as among the most friendly nations for cryptos in Europe, many investors are relocating there to use the country’s favorable citizenship policies.
However, the cryptocurrency haven could not last long, and it might be more about a government that is sluggish to respond than the government being crypto-friendly. At this time, the government does not levy any taxes on cryptocurrencies since they are seen as a payment method instead of an asset.
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Portugal To Draw Regulatory Ideas From Other Nations
Mariana Mortágua, the Deputy of the Assembly of the Portuguese Republic, has requested an investigation be conducted to see how other nations have handled crypto tax to go ahead with new regulations inside Portugal.
According to a report that was translated and published on portugal.com, some of the sessions that took place on the 13th of May were as follows:
“Many nations have systems in place, many countries are developing their models regarding this topic, and we will build our very own… It is ridiculous how the [Socialist Party] continues to refuse to tax riches that are produced within seconds using the internet while at the same time preserving the VAT on energy and not raising the minimum wage due to inflation.”
There is currently no date that can be provided for when the potential adjustments may take place. However, this seems to be the most crucial evidence that Portugal was never crypto-friendly but just lagging in legal developments. According to reports, Mendonca Mendes, the Secretary of State for Fiscal Issues, said,
“We are determining the concept of digital assets, which includes digital currencies, by making worldwide comparisons as part of our evaluation. To introduce a legislative authority that will serve the country, we are assessing the regulatory requirements in this area, whether they pertain to the fight against fraud or market control.”
The cryptocurrency legislation that is now slowly moving through the European Parliament may have a part to play in assisting with the detection of this bug. In the new documents, precise definitions of various digital assets have been laid down. As a result, developing new tax rules for member states has been simplified.
Countries that were slower to enact progressive laws may have run into problems due to the formation of digital assets. It is intriguing to note that Portugal seems to have unintentionally become a refuge for crypto firms despite the country’s intention to accomplish the opposite.
Portugal’s “Golden Visa” Trap
The phrase “Portugal tax crypto friendly” returns the most relevant results on the website getgoldenvisa.com, which claims that;
“Because of its welcoming attitude toward cryptocurrencies, Portugal serves as an excellent model for other nations in Europe. It “enticed” crypto investors into the country with promises of no tax”
To qualify for the “Golden Visa,” applicants must invest €280,000 into Portugal’s economy and spend at least 7 days physically present in Portugal each year. After that, it opened the door to a streamlined path to Portuguese citizenship in only six years. Those who have a Golden Visa may not be impacted by the modifications made to the taxation of cryptocurrency in Portugal.
Since 2012, the program has brought in $6 billion. If modifications are made to Portugal’s crypto tax regulations, enterprises that relocated there for reasons related to cryptocurrency might leave. Patrick Hansen, Crypto Venture Advisor of Presight Capital, stated that crypto individuals who migrated to Portugal are incredibly mobile and are interested to see what influence this will have over time.
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