The State Budget for the year 2023 has been approved, with new tax rules for crypto assets in Portugal, as described below.
Definition of Crpto assets according to the approved State Budget
Crypto assets are defined as all the digital representation of value or rights that can be electronically transferred or stored, using distributed ledger or similar technology.
Personal Income Tax
Income arising from Crypto assets, including mining or staking, will be taxed as business income.
Under the simplified regime, to determine the taxable income from the sale of these assets, a coefficient of 0.15 will be applied, and this income will be subject to progressive tax rates that may go up to 53%.
Gains obtained with the sale of crypto assets will be taxed at a flat tax rate of 28%.
However, the losses obtained with the sale may be carried forward in the following five years, if the individual opts to tax the capital gain to the progressive income tax rates
It is foreseen an exemption from taxation for the capital gains arising from the sale of crypto assets held for a period equal or higher than 365 days. The holding period of crypto-assets acquired prior to January 1, 2023 should be taken into account.
The expenses incurred with the acquisition and sale may be deducted against the taxable capital gain.
Crypto Assets Operations
The entities who provide custody and administration services for crypto assets on behalf of third parties or have the management of one or more crypto trading platforms, must report to the Portuguese Tax Authorities the operations carried out with their intervention.
Free transfers of Crypto assets are subject to Stamp Tax as long as the crypto assets are deposited in institutions with registered office, effective management or permanent establishment in Portugal.
If not deposited, Stamp Tax is also due when:
– The deceased was considered resident in Portuguese territory, in case of Inheritances;
– The beneficiary is considered as resident in Portugal, in the case of free transfers.
Intermediation commissions on crypto transactions will be also subject to stamp tax, at a 4% tax rate.
The value of the crypto assets given in exchange, under the Stamp Tax Code, is now considered as the amount of the act or contract in order to determine the Property Tax rate applicable.
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