Cryptocurrency In Portugal: Is Crypto Legal In The Country?
As blockchain and the crypto space have evolved over the past decade, many governments have decided that it would be a good idea to start regulating the space by imposing new taxes on crypto investors. However, there are some countries that remain tax-free or try to create a favorable environment for investors. One such crypto hub is Portugal. Learn more about the Portuguese cryptocurrency in the latest StealthEX article.
Although the country will follow EU guidelines regulating digital currencies, Portuguese officials have stated that cryptocurrencies will only be treated as assets and not as any kind of currency. And the tax system is not the only attraction: the beaches, the climate and the food are mainly for people from Northern Europe.
Cryptocurrency in Portugal: regulations
Portugal is currently one of the few countries in Europe that does not tax cryptocurrency transactions, as it does not consider currency or financial assets, according to a 2016 statement by the Portuguese tax authorities, it does not pay any VAT or capital gains tax, and only transactions paid in crypto are taxed.
This has attracted many crypto professionals to the country, including freelancers who can easily get visas and have sufficient income to stay in Portugal.
Under the Portuguese non-habitual resident (NHR) regime, non-residents have the same tax benefits as residents. NHR exempts most foreign income and wealth taxes, and offers other special benefits. In addition, Portugal has created investment incentives such as the Golden Visa residency program and the D7 visa to attract wealthy individuals and entrepreneurs.
Recent developments
In Portugal there are very few regulations in the field of cryptography. The last is probably Ministerial Decree No. 29/2020, which defines the framework principles for the creation of the Portuguese regulatory sandbox and the structure of the Portuguese digital mission, Ministerial Decree No. 31/2020, supported. Both were presented in March 2020. According to these two recommendations, new technology must be tested and promoted in the so-called "Free Technology Zones" and integrated into Portugal's digital mission.
Portugal's lack of a crypto tax has led to significant investment in the country. According to data compiled by Chinalysis, crypto transactions for Portuguese accounts were worth €27 billion as of June 30, 2021. And in 2021 alone, investors in the Portuguese headquarters received an increase of 1,300 billion euros kryptovalyutnoy, surpassing countries such as Belgium, Austria and Norway.
In this sense, the Banco de Portugal, which acts as the central bank and national competent authority, has shown great interest in the crypto space, especially in terms of protecting young investors entering the field. But he said he does not currently advocate regulation of cryptocurrencies. So far, it appears that officials have decided to wait and see how the field does.
Income categories in Portugal
Since the 2016 announcement, cryptocurrency income does not fall under the income category under Portuguese tax law, category E (investment income), category G (investment income) or category B (self-governing).
- Category G: Capital gains income refers to income from the sale of houses, shares or real estate. Portuguese law does not consider the trading of cryptocurrencies as capital gains. Therefore it is tax free.
- Category E: Dividends and interest are included in this category. As with cryptocurrency trading, there are no taxes. However, if an individual earns income from investing in crypto interest accounts, they will have to pay taxes.
- Category B: This category relates to self-employment income. If individual cryptocurrency transactions are frequent and one-off, they may be exempt from this tax category. However, trading cryptocurrencies as a core business requires recording earnings and paying taxes on profits.
Portugal and the Bitcoin family
Since last summer, luxury real estate firm Vanguard Properties has sold at least 10 homes to so-called "crypto families." More crypto investors and business owners are expected to join in 2022. Vanguard Properties has already sold five properties with a price between 1 and 1.5 million euros.
These crypto families were attracted to Portugal because of the favorable tax situation. The most famous Bitcoin family also moved to Portugal. However, as crypto-investors and professionals flock to Portugal, this crypto-paradise may not last long…
Where is Portugal Crypto going?
Currently, Portugal's crypto tax has yet to be implemented, but there are clear signs that the country is moving in that direction. In May, Portugal's finance minister said Portugal would close a legal loophole that currently prohibits taxes on virtual assets, making the country particularly attractive to cryptocurrency investors.
In August, it was reported that major banks in Portugal either refused to open accounts for cryptocurrency platforms. The banks that have started to close the accounts of companies that work with digital currencies are BCP (Banco Comercial Português) and Santander. The development follows the decision by two small banks to close Cryptoloja accounts in Lisbon. This was apparently due to strict anti-money laundering policies and know-your-customer laws. It could also be a sign that the government is tightening Portuguese laws.
In May, the Left Party (BE) proposed that cryptocurrencies should be taxed by the Income Tax (IRS) like any other profit, while the Socialist Party (PS) argued that it would be a shame if state budgets for 2022 rejected the reform. Current "foreign cryptocurrencies".
However, if taxes are raised and people leave, businesses may close and investment may be reduced or reduced altogether. Portugal has experienced the same thing. Businesses and jobs were wiped out in 2012 when tax breaks for start-ups were scrapped in Portugal. According to a recent report, almost 30,000 new businesses and more than 220,000 new jobs could have been created if a lower corporate tax rate had been introduced instead.
Portuguese crypto startup
There are many crypto projects from Portugal. Here are some examples of how the lack of strict regulations has helped the field to thrive.
- Taikai is a professional network based on blockchain. Founded in 2018, it connects talent, entrepreneurs, creators, independent developers, startup members and others. Organizations post their challenges, rules and prizes on Taikai, and students, inventors or startups can create a solution to the challenge as a team or individually, and the selected candidate will receive the prize. The company uses Kai tokens on its platform.
- Eyeso is a blockchain-based platform for photographers and digital artists. It provides a platform for creators to license their work, network and monetize. Rewards are generated through smart contracts.
- The AppCoins project is developing a protocol that will help increase the size and revenue of the mobile advertising market. The protocol must be implemented as a cross-platform solution, meaning that any app store can connect to the system and benefit from it to streamline its operations.
- KimiaCoin is a peer-to-peer decentralized currency for the biotech industry. The company plans to launch the KimiaCoin exchange, a future coin exchange in the biotech sector. Funds raised through the KimiaCoin exchanges will be used to develop biotechnology, finance DNA and gene editing, and brain-computer interfaces to detect brain wave activity and reduce serious diseases.
Apart from many crypto startups, Portuguese citizens can use any international crypto exchange. For example, StealthEX is ready to offer their services: the exchange is available in Portuguese, so they can easily make crypto purchases.
Summary
Crypto regulations are being tightened in almost every country in the world, leaving very little room for crypto traders, miners and investors. Portugal remains a crypto paradise. The question is how long the country will remain an attractive travel destination as the clouds seem to be getting heavier. However, with so much happening in the crypto space, the country still has time to develop its marketing strategies and cement its position in the international crypto space.
Where to buy bitcoin in Portugal?
StealthEX is here to help you buy digital assets if you are a Portuguese citizen. You can do this in person and do not need to register for the service. Our crypto collection contains more than 600 different coins and you can make transfers from one wallet to another quickly and easily.
How to buy cryptos in Portugal?
Just go to StealthEX and follow these simple steps:
- Select the pair and trade the desired amount. For example BTC to ETH.
- Click the Start Business button.
- Provide the recipient address to transfer your crypto.
- Edit the transaction.
- Receive your cryptocurrencies.
Follow us on Medium, Twitter, Telegram, YouTube and Reddit to stay up to date with StealthEX.io and the rest of the crypto world.
Remember to do your research before buying crypto. The views and opinions expressed in this article are solely those of the author.
Tags bitcoin bitcoin adoption crypto world cryptocurrency adoption PortugalThe post Cryptocurrency in Portugal: Is cryptocurrency legal in the country? This first appeared on StealthEX.