'Crypto Heaven' Portugal Makes U-Turn, Plans To Start Taxing Cryptocurrency Gains From 2023

Portugal, which is one of the most crypto-friendly nations in Europe and is often considered a 'crypto heaven', is planning a major policy shift. It will start taxing digital-currency gains on purchases held for less than a year.

Currently, Portugal does not tax crypto gains unless they come from professional or business activities. But that¡¯s about to change.

A provision in the country¡¯s proposed 2023 budget would tax gains on crypto holdings held for less than one year at a rate of 28%, according to the plan submitted to parliament yesterday. According to a Bloomberg report, crypto assets held for longer than 365 days will continue to be exempt from taxes, it said.

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This move may push away crypto enthusiasts from the country, many of whom have entirely shifted to the country, all thanks to its crypto-friendly laws.

Proceeds from the issuance of cryptocurrencies and crypto mining would also be considered income and subject to taxes in the government plan, as per the Coindesk report.

Portugal¡¯s Finance Minister, Fernando Medina, had reportedly told the parliament last May that cryptocurrencies would soon be subject to taxation. The draft proposal now has to go through the full legislative process before becoming law.

Despite being one of the least wealthy countries in Western Europe, Portugal has long promoted its favourable tax policies in order to attract foreign investors and maintain 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. As per the report, since then, the number of foreign residents in Portugal has risen by roughly 40%.

Portugal's changed stance on crypto taxes brings it in line with many other nations around the globe which have been taxing crypto. Among them are Australia, the United Kingdom, India, and the U.S.

Also Read: Businesses In Singapore Begin Accepting Crypto Payments

Portugal's Bitcoin Beach

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One of the proofs of how popular crypto is in Portugal is the crypto heaven nation¡¯s ¡®Bam Bam Bitcoin Beach¡¯. Despite the crypto market crashing and losing trillions of dollars in market value this year, there seems to be no crypto winter at the beach. It is situated in southwestern Portugal. Upon reaching the beach, yellow Bitcoin flags can be seen blowing in the wind, and one can hear conversations about cryptocurrencies.

To learn more about the Bitcoin beach in Portugal, click here.

Also Read: Crypto Fundraising In China Can Now Land You In Jail

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