A 28% capital gains tax on cryptocurrencies will be imposed by the Portuguese government as a part of its 2023 budget plans.
Portugal announced its intentions in a budget plan report on Monday, where it outlined digital currencies held for less than a year will incur the aforementioned tax figure, whereas crypto gains made after the year timeframe will be exempt.
According to a Bloomberg report, Portugal’s Secretary of State for Tax Affairs, António Mendonça Mendes, believes the new crypto tax is a “regime that fits into our tax system and also to what is being done in the rest of Europe”.
The budget highlights new cryptocurrencies and mining operations as taxable income, as the Portuguese government also looks set to enforce a 4% tax on free crypto transfers which will apply to stamp duties if deemed necessary.
A standard 10% tax on all cryptocurrencies has also been proposed as Portugal contends with an influx of international residents who have flocked to the country due to its feasible visa and immigration restraints, with a 40% increase in immigration over the course of the last 10 years.
The latest decision on taxing crypto gains is a sharp turn on its initial decision to not introduce new taxes on crypto, made earlier in the year.
Proposals for the new taxes came from two small left-wing parties as Portugal’s Socialist majority party were yet to make any sort of proposals, with the Minister of Finance warning that a crypto tax was imminent.
Falling in line with the recent crypto tax proposals, last April, Portuguese bank Bison Bank received the country’s first crypto licence from Banco de Portugal and in doing so, became the its first operating crypto bank.