Portugal, often seen as crypto-friendly, released a draft budget which proposed a tax on gains from digital currencies purchased for less than a year. Next door neighbor of Portugal, Spain maintains a zero tax on cryptocurrency profits, yet Portugal proposes a 28% tax on crypto gains in the draft which was presented on October 10.
Other parts of the draft budget suggest that issuing and mining cryptocurrency produces taxable income. The budget also suggests a 10% tax on crypto transfers and a 4% rate on commissions from crypto brokerages.
Though Portugal could introduce taxes on short-term crypto investments, crypto held for more than one year will remain untaxed. Secretary of State for Tax Affairs António Mendonça Mendes said this approach “fits into our tax system and also to what is being done in the rest of Europe.”
Big Slap from Portugal
Roberts, a former CFO of Lyft (LYFT) , didn’t even last a year in his job. He had been appointed in December 2021. He does not give the reasons for this departure.
In addition to talent departures, the industry is also in the crosshairs of regulators around the world.
The latest news is particularly bad.
Portugal, often seen as crypto-friendly, plans to start taxing gains from digital currencies purchased for less than a year.
Basically, the country will tax the earnings made by anyone holding digital currencies for less than a year. The tax rate is 28% according to a proposal that is part of the 2023 budget. It was unveiled on Oct. 10.
Crypto assets held for more than a year will remain tax-free.
Until now, the Portuguese government did not tax crypto gains unless they were made by professionals and companies.
You can read the draft of this proposal here. It’s in Portuguese.
The government also wants to create a 10% tax on crypto transfers and a 4% tax on commissions charged by brokers.
The proposals have yet to be approved, but it is a huge change that should thwart many industry players who were considering moving to the country for its pro-crypto politics. Indeed, in recent years, the country has welcomed crypto firms eager to take advantage of an absence of regulation.
In addition, the country, which wants to attract investors, offers a special program, known as the non-habitual resident (NHR) tax regime. The NHR provides a flat 20% tax on foreign residents’ income and full tax exemptions after 10 years of residence.