The Portugal government has come out with a diktat that spells out the fact that from here on, there will be an income tax amount levied on the income earned and generated from cryptocurrencies, which will be to the tune of 28%. These were the contents of the freshly released 2023 budget draft, officially declared on Monday, October 10, 2022.
However, a special clause stipulates that this mentioned tax application would apply only in the specific case of cryptocurrencies that individuals have owned for a period of less than one year. In the same case scenario, the earnings derived from cryptocurrencies for a period extending more than that time frame would also not come under the mentioned tax bracket.
In the same breath, all transactions dealt with in crypto deemed free of any transaction charges attached will also come under the tax umbrella. Another imperative point to be duly noted is that there will be a flat 4% income tax amount levied on the charges duly paid to middlemen in the form of numerous types of commissions.
The government will work on the regulatory framework, according to Fernando Medina, Portugal’s finance minister, who made his vow to start taxing cryptocurrency earlier that month. Additionally, he emphasized that there shouldn’t be any “gaps” that would exclude some earnings from paying taxes in the nation.
The administration said that by establishing a framework to “promote the cryptoeconomy,” these steps will offer a feeling of “safety and legal certainty.”