Portugal may soon shed its digital currency tax haven status. Finance Minister Fernando Medina confirmed to Parliament that his ministry is studying how to tax digital currency gains in the country.
According to local news outlet Sapo, Medina made the confirmation while speaking at a Parliamentary hearing for the country’s 2022 budget. The Minister noted that Portugal has been lagging behind other countries in taxing digital currencies. He also did not provide a timeframe for when the law will be rolled out.
“Several countries are building their models concerning this issue [crypto taxing] and we are going to build our own. Right now, I don’t want to make a commitment regarding a date, but we’re going to adapt our legislation and our taxation,” Medina said.
However, the minister highlighted several considerations that the government is making to tax digital currencies. The tax law will be comprehensive so as not to leave digital currency investors any loopholes to dodge paying taxes. But it will also aim to follow the principle of justice and efficiency.
The policy goals are targeted at establishing a system that “makes taxation adequate, but does not make taxation an exceptional character that ends up reducing revenue to zero,” he said.
Market participants expect the legislation to favor digital currencies
While the budget for the country is set to be approved by the end of May, market participants do not envision it including the digital currency taxation provisions.
On Portugal's plans to tax crypto, a 🧵⬇️,
– Finance Minister said crypto would be taxed in a loose statement with few details 3 days ago
– Portugals bureaucracy moves hyper slow, legislation like this takes a long time to move, never mind be implemented, IMO 2+ years
— Jorge. (@nftjorge) May 16, 2022
The tweet rationalized that the legislation will likely be designed to damage the other digital currency-friendly incentives. For him, the government has taken years to establish these incentives to attract investors to the country.
“Portugal has based a lot of legislation around attracting people to the country and giving them huge tax breaks. This is no different, once implemented crypto-friendly incentives should still be in place,” he said.
Hence, he expects the legislation to further fortify the country’s status as a tax haven and also leave a ton of “convenient loopholes.”
Portugal has long been a famous destination for digital currency investors because of its “zero tax” on the assets that have been in place since 2016. Many digital currency investors from other parts of the world have taken advantage of the arrangement according to a CNBC report.
Watch: CoinGeek New York presentation, Digital Currency as a Tool for Financial Inclusion
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.