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IS PORTUGAL A TAX HAVEN FOR INVESTORS IN DIGITAL TOKENS?

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The answer is "no", but we are in the field of tax law, so there are always many nuances.

 

In general terms, and according to the definition of the European Central Bank, cryptocurrency is a type of digital currency, not yet regulated, nor linked to any central bank.

The specific regulations, very vague, comply with European Union regulations; and certainly Portugal is not considered a Tax Haven by any state.

 

Is Portugal a favorable jurisdiction for cryptocurrencies?

 

As a general rule yes, for two reasons:

 

  1. The conception that a 2016 "tax ruling" issued by the tax authorities give to cryptocurrencies.
  2. The NHR regime which also allows not to be taxed on foreign source income.

 

However, to obtain this regime it is necessary to meet a series of conditions that are not always met. It is necessary to make sure that the application, as far as possible, will be accepted before even moving to that country.

It is highly recommended to hire a Portuguese tax advisor to advise you properly.

 

Is the sale of cryptocurrencies not taxed in Portugal?

 

Portugal is one of the few countries that do not tax gains derived from the sale of cryptocurrencies.

Such income, provided it is generated outside Portugal, is exempt from taxation as a non-habitual resident for a period of ten years from the granting of the status.

In a binding resolution issued by the Portuguese tax authorities on the issuance of cryptocurrencies, which does not deal with personal income tax but with VAT, following the case law of the Court of Justice of the European Union which considers "bitcoin, as traditional currencies that have a discharge value, have no other purpose than to serve as a means of payment". This means that "being means of payment whose function alone is exhausted, their mere transmission does not constitute a VAT generating event".

Although the issue of taxation of cryptocurrencies remains controversial, and the lack of regulation in Portugal on operations and transactions with cryptocurrencies has both advantages and uncertainty, the truth is that Portugal ends up being attractive for those who want to invest in cryptocurrencies. This is a good idea, as long as you consider the possibility of moving to Portugal and enjoy the Non-Habitual Resident regime.

 

But consider that moving to another country is a very important decision and it is conditioned to maintain the favorable conditions. As we have already mentioned, there is no specific regulation, but the European Union is moving in this direction, which will imply the transposition of the future regulation to the Portuguese Legislation at some point.

Josep Navarro's picture
Josep Navarro es Licenciado en Económicas por la UB, especializado en Inspecciones Tributarias, con más de 25 años de experiencia en asesoría fiscal para empresas y particulares en España.

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