Crypto Traders Could Benefit From Portugal’s Crypto-Friendly Laws
The European country of Portugal could be the new hub for crypto traders and miners, following the country’s crypto-friendly legislation. Currently, the country allows small-scale crypto traders to benefit from its zero-VAT policy that has been active since 2017.
Portugal Implements Crypto-friendly Taxes
The crypto-asset trading and mining environments in Portugal seem to be safer and clearer for those involved in Bitcoin trading and mining in the country. As of December 2017, the country’s Ministry of Finance announced that Bitcoin traders in the country could not incur any taxation on their crypto profits.
According to a statement from the ministry, only income or trades generated from professional activities are taxable.
“The sale of Bitcoins is not taxable under IRS in relation to the Portuguese tax system, namely within the scope of the category E (capitals) or G (gains), except when, due to its habituality, it constitutes a professional or business activity of the taxpayer, in which case it will be taxed in accordance with category B,” the official stated.
For a casual crypto trader, this is a relief, as there would be no taxes for such trades. However, companies or individuals trading Bitcoin as a service or individuals who earn income from crypto trading activities must pay taxes. Besides, salaries paid in the form of Bitcoin or other cryptocurrencies are taxable just as they would be with fiat currencies.
New Crypto Guidelines
To enforce the assurance, the Portuguese Tax and Customs Authority released clear instructions in January 2019. The guidelines addressed a query on Article 68, which outlines the country’s general tax law.
The guidelines gave answers to frequently asked questions regarding Bitcoin and other cryptocurrencies. It also answered important questions regarding the documents to use in particular cases, cryptocurrency invoices, and the conditions for ICOs among others.
Commenting on the issue, Universe Coin’s Chief Operating Officer Jorge Mesquita said:
“Currently the Portuguese Securities Market Commission (CMVM) evaluates each ICO individually, and they consider that ‘a commitment from the issuer to adopt actions that result in an expectation of financial return to the investors must be present in the qualification of transferable securities,’ which we abide by, and there are no laws or regulations specifically addressing token sales, so we haven’t run into any problems.”
With crypto-friendly tax laws, Portugal now joins the list of other nations with similar practices such as Malta. The country remains a fertile ground for crypto traders and miners before it implements a proper legal framework, which will depend on the progress of the crypto space in the country.
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