More and more of you are taking an interest in cryptocurrency taxation in Portugal. Portugal has seen a boom in tourism for years, but also an increase in the number of foreigners moving there for tax reasons to take advantage of the non-habitual resident (NHR) status.

As you know, since 2009, Portugal has offered a residency status (RNH) that provides tax benefits for a period of 10 years; this status, which was reformed in 2019 and 2020, remains highly attractive.  Today, the country is becoming a dream destination for the cryptocurrency world. Indeed, since the cryptocurrency boom—and especially since Bitcoin’s rise—governments in Europe and around the world have begun to legislate on the matter. Portugal, for its part, is becoming one of the most attractive countries for investment in this sector thanks to its significant tax advantages.

If you're involved in cryptocurrency and would like to take advantage of the tax benefits offered by Portugal, don't hesitate to contact us so we can discuss your project together.

Cryptocurrency in Portugal

In 2018, Portugal ruled that the purchase and resale of cryptocurrency should be exempt from capital gains tax. Furthermore, this exemption can be combined with the benefits of RNH tax status, which is available to new residents.

This exemption is subject to one condition. The purchase and resale of cryptocurrencies must be conducted for personal purposes and non-professional and apply only to Portuguese tax residents.

French law, on the other hand, does not exempt capital gains realized on cryptocurrencies. Since January 1, 2019, capital gains from cryptocurrencies have been taxed at 30%, including social security contributions, if the gain exceeds 305 euros.

A country that offers more benefits than others

Many countries still lack legislation on cryptocurrencies. However, European countries are beginning to enact laws on the subject; Germany, for example, recognizes cryptocurrencies as personal currency in the same way as foreign currencies (foreign exchange market). This means that if you hold onto your cryptocurrencies for more than a year, you’ll be exempt from capital gains tax on any profits made.

Belarus is also one of the most advanced countries in this area. In fact, the country has legalized cryptocurrencies, ICOs (Initial Coin Offerings), and smart contracts. Furthermore, investing in and trading these currencies are exempt from all taxes through 2023.

Compared to its European competitors, Portugal offers numerous advantages. In addition to exempting the purchase and resale of cryptocurrencies for personal use from all taxes, individuals can also benefit from a total exemption on foreign-source income under the RNH status. For retirees, it is also possible to combine this benefit with the tax exemption on private-sector retirement pensions.

Portugal, a crypto-friendly country

Thanks to its tax advantages for cryptocurrencies, combined with the benefits of the RNH, Portugal has established itself as one of Europe’s leaders in this sector. Like its neighbors, Portugal is one of the few countries in Western Europe that does not tax cryptocurrencies. With this tax system, it has become an attractive destination not only for investment but also for the blockchain ecosystem. Cryptocurrency exchanges in Portugal are also exempt from VAT, as indicated in the Ministry of Finance.

Portugal is, however, considering how to regulate cryptocurrency for tax purposes; to date, nothing has yet been decided or discussed, but that should happen soon.