thecoinrise.com
As policymakers focus on short-term crypto asset owners, Portugal’s taxation policy on cryptocurrencies is about to enter a new phase. The government is preparing a new crypto tax that will expand its current crypto taxation laws.
Bloomberg reports that Portugal’s government is proceeding with plans to tax profits on cryptocurrency held by citizens for less than a year. This is one of the ideas included in the 2023 government budget. The change will result in a 28% tax being applied to gains made from cryptocurrency kept for under a year.
Major changes in existing taxation policy
The proposed regulation will represent a significant change in Portugal’s existing crypto taxation policy. Prior to this, the nation exclusively taxed digital assets obtained via legitimate business or professional activity. Any amount of time spent holding cryptocurrency did not result in a taxable event.
Anyone who profits from the sale of cryptocurrency kept for less than a year will now be required to pay taxes. However, there is no tax liability for crypto assets kept for more than a year.
The proposed budget also said that brokers’ fees on cryptocurrency transfers will be subject to a 4% tax rather than the 10% tax imposed on free transfers. Moreover, crypto issuance and mining could also see some changes in new taxation rules.
The Portuguese government claimed that the new regulations will be in line with similar crypto laws in other European countries, which do not impose taxes on cryptocurrency holdings longer than a year. Portugal’s Secretary of State for Tax Affairs, António Mendonça Mendes, commented on the upcoming rules by stating:
“It’s a regime that fits into our tax system and also to what is being done in the rest of Europe.”
Crypto taxation has recently come under more notice by regulators around the world. In addition to a 1% tax deducted at source (TDS) on all cryptocurrency transactions, India levies a 30% capital gains tax on the ownership and transfer of digital assets.
On the other hand, South Korea has delayed until 2025 its plans to impose a 20% tax on cryptocurrency revenues.