The Freedom of Cryptocurrency in Portugal
In a remarkable twist for crypto enthusiasts, Portugal’s Tax Authority has thrown a generous bone to digital currency aficionados declaring that both trading and payments in crypto are exempt from taxes. For those of you who own a few coins or fancy dabbling in the market, buckle up—this could be your golden ticket!
What the Tax Authority Says
In a recent report from Jornal de Negócios, the Portuguese Tax and Customs Authority confirmed that all transactions involving cryptocurrencies, whether trading or spending, will not incur Value Added Tax (VAT). This decision not only affirms the tax-friendly stance Portugal has adopted for cryptocurrencies, but it also offers potential investors a sunny paradise away from the tax wolves lurking elsewhere.
A Glimpse at the Legal Backing
The Tax Authority’s current position leans heavily on a 2015 ruling from the European Court of Justice. This ruling (yes, the fancy kind that makes lawyers nod knowingly) declared that Bitcoin qualifies as a method of payment, which makes it exempt from VAT obligations. The implications of this are huge—it suggests that trading your Bitcoin for a latte won’t cost you a cent in taxes. Just don’t let your barista know you’re paying in crypto; they might charge you extra for being ‘too trendy.’
Past Perspectives on Crypto in Portugal
This isn’t the first rodeo for Portugal when it comes to crypto and taxes. Back in 2016, the Portuguese tax agency previously ruled that income gained from crypto sales is not subject to income tax. They seem to like the idea of encouraging digital currency innovation. You might say they’re riding the crypto wave while other countries are still figuring out which way is up.
From the Central Bank’s Cautionary Notes
Interestingly, the central bank of Portugal had some concerns about cryptocurrencies back in 2013, referencing a cryptic paper (pun intended) from the European Central Bank in 2012. They pointed out that Bitcoin can’t really be deemed as a secure currency since it is issued by wild and unregulated entities. So while crypto lovers rejoice at the tax exemptions, the old guard remains apprehensive. Maybe they just need a calm discussion over a cup of—here’s a thought—Bitcoin-flavored coffee?
