September 21, 2019
The Portugal Tax Authority (PTA) announced that cryptocurrency trading and payments in crypto would not be subject to value-added tax (VAT).
According to the PTA “An exchange of cryptocurrency for ‘real’ currency constitutes an on-demand, VAT-free exercise of services.” The regulator also says that no income tax has to be paid by individuals who receive payments in crypto either.
While trading cryptocurrencies and receiving payments in cryptocurrencies will not be taxable events, companies will still need to pay capital gains tax (between 28% and 35%) as well as any income tax associated with employee payments (if organisations and employees agree on salary payments in Bitcoin).
Portugal belongs to the seven-country group where essentially there is no taxation on cryptocurrency trading and payment. The list among bigwigs, includes Germany, Singapore, Portugal, Malta, Malaysia, Belarus and Switzerland. Similarly, France is considering providing relief to crypto traders by lowering the taxes on their commercial activities and enabling different financial institutions to invest in cryptocurrency.
Cryptocurrency refers to electronic money that is used in online transactions. This money is stored in electronic wallets or computer files. Some common cryptocurrencies include Bitcoin, Ethereum, Ripple, Litecoin, etc. The blockchain technology is used in transferring and monitoring cryptocurrency transactions.
Source: Jornal de Negócios