Portugal is considered as a crypto haven due to its very simple rules and negligible taxes on crypto. The country also keeps showing keen interest in crypto and does not take a cautious approach like most countries do. However, in 2022, the government announced that it will set up a tax regime in 2023 for regulating crypto transactions. Contrary to the expectations, crypto holders welcomed this step as it provided them with greater security and clarity on handling and disclosing their crypto assets. The ownership of crypto has risen by about 40% in the last decade in Portugal and the trend still is increasing.
Do you have to pay crypto tax in Portugal?
Yes, you have to pay crypto tax in Portugal as either Short Term Capital Gains tax or as Income tax.
When do you have to pay tax on crypto in Portugal?
If you hold a crypto asset for less than a period of 365 days and then sell it or spend it, then short term capital gain tax rates are levied.
If you got paid in crypto as a salary of self employment income, then it is taxed as income tax.
What crypto transactions are taxable in Portugal?
- Sale of crypto
- Spending in crypto
- Swapping crypto
- Receiving remuneration in crypto.
What are the Crypto Tax Rates in Portugal?
For crypto received as income from passive crypto investments or as salary, a flat rate of 28% is levied as tax.
Sale of crypto held for less than 365 days will be charged at a rate of 28% under short term capital gains tax.
Portugal Income Tax Brackets (2023)
| Taxable income (EUR*) | Tax rate (%) | Deductible amount (EUR) | |
| Over | Not over | ||
| 0 | 7,479 | 14.5 | 0 |
| 7,479 | 11,284 | 21.0 | 486.14 |
| 11,284 | 15,992 | 26.5 | 1,106.73 |
| 15,992 | 20,700 | 28.5 | 1,426.65 |
| 20,700 | 26,355 | 35.0 | 2,772.14 |
| 26,355 | 38,632 | 37.0 | 3,299.12 |
| 38,632 | 50,483 | 43.5 | 5,810.25 |
| 50,483 | 78,834 | 45.0 | 6,567.33 |
| 78,834 | 48.0 | 8,932.68 | |
Portugal Capital Gain Tax Rates (2023)
Capital gains are taxed at a flat rate of 28% in Portugal.
How is Tax Calculated on Cryptocurrency in Portugal?
In Portugal, crypto can be taxed as capital gain or as income.
Crypto is taxed as income tax whenever you are getting paid in crypto or receiving any income after investing in crypto. In this case, the tax rates are determined according to your total income and whichever bracket you fall in.
Capital Gain tax rates are levied when you sell crypto. In this case, a flat rate of 28% is levied on crypto gains. Now, in order to determine the values of your capital gain, you need to calculate the values at which you acquired the asset and at the value you sold it. In Portugal, your first acquired crypto is sold first, therefore FIFO (First In First Out) method is used.
According to FIFO Method, you sell your oldest acquired coin first and cost is calculated according to the respective prices at which the coin was bought.
Let’s take an example,
Say you bought 2 BTC for EUR 20,000 in 2020 and 4 BTC for EUR 60,000 in 2021. Then you sold 4 BTC in 2022 for EUR 1,00,000:
- FIFO METHOD
You sell 2 BTC from 2020 and 2 BTC from 2021. So cost price is:
= 20,000 + (2/4)*60,000
= EUR 50,000
Profit = 1,00,000 – 50,000
= EUR 50,000
Here, taxes are levied on EUR 50,000 .
Is there any Crypto Tax Free in Portugal?
- Buying crypto and transferring crypto is tax free in Portugal. ALos, crypto held for more than 365 days is also exempt form taxes.
Crypto Tax in Portugal – FAQs
Do you have to pay tax when you buy crypto in Portugal?
No, you don’t have to pay when buying crypto in Portugal.
Do you have to pay tax when you sell crypto in Portugal?
Yes, sale of crypto is subject to short term capital gains tax.
Do you have to pay tax when transferring crypto in Portugal?
No, transferring crypto is not taxable.
Do you have to pay tax when spending crypto in Portugal?
Yes, spending in crypto is taxable.
Is swapping crypto taxable?
Yes, swapping is taxable in Portugal
How much tax on crypto gains in Portugal?
As capital gains, 28% and as income tax, also 28%.
How do I avoid capital gains tax on crypto in Portugal?
Holding your crypto assets for more than a year will exempt them from taxes.
Market Research Intern, Octaloop
Maitreyee takes a keen interest in financial technologies and their potential to transform lives at the grassroots. Put together with her penchant for Economic Research, she brings tonnes of academic and actionable insight into our products. Maitreyee is contributing at Binamite as a Market Research Intern, and when she's not doing that, you can find her exploring the city or buried in a book.