A budget draft proposal submitted to parliament by Portugal’s Finance Minister Fernando Medina calls for taxing capital gains on cryptocurrency assets held by investors for less than a year.
While the country already taxed capital gains on cryptocurrency holdings derived from professional or business activities, individual citizens were exempt. The new budget draft, however, calls for a levy of 28% on capital gains from cryptocurrency assets held for less than a year. Gains on cryptos held for a period of longer than a year would remain unaffected.
Proceeds from the issuance of cryptocurrencies and crypto mining would also be considered income and subject to taxes in the government plan.
Finance Minister Fernando Medina last May told parliament that cryptocurrencies would soon be subject to taxation.
The draft proposal remains just that, and still must go through the full legislative process before becoming law.
Among the less wealthy of the Western European countries, Portugal for some time has promoted its friendly tax policies to incentivize foreign investors to inject a steady flow of capital into its economy. In 2012, the country launched its Golden Visa residency by investment program to spur job creation and reignite production within Portugal’s borders. Since then, the number of foreign residents in Portugal has risen roughly 40%.