Porto, Portugal. Cityscape

Portugal’s parliament rejects proposals to tax digital currencies

Portugal is still upholding its digital currency tax haven status for the time being. The Portuguese parliament has voted against two separate proposals to tax digital currencies in the country during its ongoing budgetary negotiations.

Portuguese news outlet ECO reports that the proposals were brought forth by two left-wing minority parties, Block de Esquerda and Livre. The proposal from Livre sought to tax gains above €5,000 (about $5,340.45) made from digital currencies.

Mariana Mortágua, a member of the Bloco de Esquerda party in the parliament, previously said the party proposed to end the lack of a tax regime for digital currencies. The proposal would have seen digital currencies taxed on par with capital gains on equivalent income.

“Regardless of necessary future crypto regulations, our contribution to put an end to this offshore is to subject crypto assets to the same rate applicable to capital gains on equivalent income,” she said.

Despite the failure of the proposals to gain ground in this year’s budgetary negotiations, the prospect is not entirely done. The country’s finance ministry has revealed that it is studying the possibility of imposing capital gains tax on digital currencies as it considers it a necessity.

The finance minister, Fernando Medina, told parliament that Portugal needs to fill all “gaps” that allow certain gains to avoid being taxed. He noted that taxing the asset goes beyond just applying a tax rate, adding that his ministry is building a comprehensive model.

“Many countries already have systems, many countries are building their models in relation to this subject and we will build our own,” he said.

However, Medina declined to provide a timeline for when this model will be ready, leaving market participants to speculate that it may take up to two years to arrive.

Digital currency adoption keeps growing in Portugal

Portugal has long been a choice destination for digital currency investors due to its zero tax on the asset. Madeira, an autonomous region in Portugal, has even taken it a step further by announcing Bitcoin as de facto legal tender, according to a Forbes report.

Miguel Albuquerque, president of the Regional Government of Madeira, stated that residents would not need to pay any personal income tax when buying or selling Bitcoin. Madeira follows in the footsteps of El Salvador.

How the digital currency taxation regime Portugal is considering will affect the region remains unclear. Meanwhile, Portugal is not the only country that has turned attention to digital currency taxation recently. Others include Germany and Australia.

In Germany, a new tax regime has been introduced that exempts digital currency held or staked for more than one year from capital gains tax.

Watch the BSV Global Blockchain Convention Dubai 2022 Day 1 here:

YouTube video

Watch the BSV Global Blockchain Convention Dubai 2022 Day 2 here:

YouTube video

Watch the BSV Global Blockchain Convention Dubai 2022 Day 3 here:

YouTube video

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.