26 May 2022 Anthony Lehrman
Portugal Would Not Impose A Bitcoin Taxation For Now
Portugal’s parliament decided to reject a proposal, aiming to impose taxes on Bitcoin and other cryptos. The rejected proposal came from the left-wing parties Bloco de Esquerda and Livre during a May 25 budget session.
According to the proposal, the government had to tax crypto profits in excess of €5,000 ($5,340.45). The move would have eradicated Portugal’s spot as a crypto tax haven, as the current situation implies that proceeds from individual sales of cryptocurrencies have been tax-exempt since 2018. Furthermore, the trading of digital assets in Portugal has not been considered as an investment income.
The liberal legislation also made Lisbon an attractive place for crypto startups and events although businesses that accept crypto do have to pay income taxes.
The winding road of crypto taxation in Portugal
The Portuguese government has its fair share of trouble with crypto taxation since Portugal’s Minister of Finance Fernando Medina stressed that the country may soon see cryptos being subject to capital gains taxes. Furthermore, Antonio Mendonça Mendes, the nation’s deputy minister for finance and tax affairs, added that taxing crypto was a “complex reality” and capital gains may not be enough and Portugal’s government could also impose a value-added tax (VAT), stamp duties, or property taxes on digital assets.
Brazil requires citizens to pay taxes on crypto trading profits
Portugal’s efforts seem to be in sync with Brazil, as the Portuguese-speaking nation and its Federal Revenue office want to tax crypto trading profits even if those profits are staying in cryptos and not converted to Brazil’s national currency.
This is the latest step for Brazil's Federal Reserve (RFB) to impose such taxes on the crypto market. According to the financial institution, crypto investors must pay income tax on transactions.
However, the declaration from the RFB does not clearly specify what is a profit, as a profit is recorded as capital gains only in fiat currency. The RFB argued that there is still an obligation to pay taxes on the eventual profit.
"The capital gain calculated on the sale of cryptocurrencies, when one is directly used in the acquisition of another, even if the acquisition cryptocurrency is not previously converted into reais or another fiat currency, is taxed by the individual's income tax." the institution added.
The RFB aims at large-scale investors, as according to the regulator, only investors who trade more than BRL 35,000 (around $7263.67) in cryptocurrencies should pay income tax.
Meanwhile, Federal deputy Kim Kataguiri (Podemos, or the National Labor Party) stressed that RFB’s proposal is illegal since there is no fiat currency involved in crypto-to-crypto trading.
"In the exchange between crypto assets, there is no exchange involving currency; one crypto asset is exchanged for another, therefore, there is no equity increase," Kataguiri added.
Bitcoin cryptocurrency taxation cryptocurrency news crypto news Tax taxes Brazil
