Portugal U-turns on Crypto Taxation

Just ten days after the country’s finance minister indicated that cryptocurrencies could be taxed in the near future, Portugal has taken another key decision. Portugal’s latest crypto tax decision comes after the government tabled its 2022 budget in parliament on Wednesday.

Portugal, the crypto tax haven

On May 16, Portuguese Finance Minister Fernando Medina said that several countries were building models around crypto taxation. Prior to the announcement, the country had the rare distinction of being a “tax haven”. Crypto investors around the world considered Portugal a convenient place to invest because it had no cryptocurrency tax.

Additionally, Portugal has always been at the forefront of crypto adoption. In January 2022, the first physical store https://coingape.com/portugal-opens-first-physical-store-for-buying-and-selling-of-bitcoin/ which allowed buying and selling cryptocurrencies in Portugal had opened.

Portugal also considers cryptocurrencies as a form of payment compared to simple digital assets. This adds to Portugal’s overall status as a crypto-friendly country, alongside El Salvador.

New proposal rejected

In a latest development that could be a welcome move for crypto investors, the Portuguese government made an announcement on Wednesday. The country’s earlier proposal to tax cryptocurrencies was rejected by parliament.

While Western countries continue to move in the direction of adopting cryptocurrencies, India, on the other hand, has been tough with its rules. Earlier this year in March, the country approved a proposed 30% crypto tax as part of its national budget for 2022-23. The proposal also included a 1% withholding tax (TDS) on every crypto transaction.

However, it drew a lot of criticism in the country. Many believe the rules could hit India with a potential brain drain in the cryptocurrency industry.

On the other hand, Slovenia last month announced a new flat tax plan for the country. A flat tax of 5% has been introduced to help simplify the process of digital currency transactions in the country.

Anvesh is keen to write about major announcements regarding crypto adoption by institutions and popular figures. Associated with the cryptocurrency industry since 2016, his interest in this space helped pivot his career as a journalist towards the blockchain ecosystem. Follow him on Twitter at @AnveshReddyEth and contact him at anvesh(at)coingape.com

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.