Bitcoin & Crypto Trading and Payments Declared Tax-Free by Portugal Tax Authority
- Crypto transactions exempt from VAT or capital gain taxes – PTA
The Portugues Tax Authority (PTA) has officially announced that both trading and payments in cryptocurrencies will not be taxed in the country, as per the report published on August 26 by a Portugues business newspaper.
PTA confirmed that crypto transactions or payments are exempt from Value Added Tax (VAT) or capital gain taxes. The Portuguese Tax and Customs Authority clarified the information, and published an official document, to a local mining company in response to its request for more details.
The authority states that the exchange for cryptocurrency for fiat money constitutes a VAT-free exercise of service. It further added that crypto users don’t have to pay income tax either. Previously, the PTA stated that trading cryptocurrencies or receiving payments in cryptos will not be a taxable event.
In 2016, the agency said that income from the sale of crypto in the country is not subject to income tax but companies will have to pay capital gains tax.
While Portugal has become a crypto-tax haven for cryptocurrency users with this move, governments around the world are tightening the scrutiny on those that have digital assets.
The Internal Revenue Service (IRS) has taken many steps to identify the tax-payers who are defaulting on their crypto-relating investments.
The Australian Tax office also issued warning letters to 18,000 Self Managed Super Funds (SMSFs) for concentrating the investment in one asset class. Under the Australian law, it’s illegal to use over 90% of retirement funds on a single class.
In a positive move, New Zealand's tax office, the Inland Revenue Department (IRD) made it legal to receive salaries in cryptocurrency and be taxed accordingly. The crypto asset paid, however, must be exchanged for fiat currency and have the primary purpose of acting like a currency or pegged to one or more fiat currencies.