One of the most complicated parts of the development of the cryptocurrency industry has been the creation of comprehensive cryptocurrency-related tax codes across the world. One of the reasons for this is the fact that many world governments un until recently, didn’t even recognize cryptocurrency as a valid form of payment and this stunted its growth. Fortunately, many countries, particularly in Europe, are developing cryptocurrency tax code and are hoping to regularize the use of crypto as well as giving the industry a place in the mainstream financial market.
One of the latest of these is Portugal, who have clarified via a report on August 27, 2019, that cryptocurrency payments and crypto trading are not to be taxed within the country. This brings an end to a great deal of speculation and is also good news for the industry as it will encourage the use and trading of crypto in Portugal.
Tax, Crypto and Portugal
As per the report, the Portuguese Tax and Customs Authority have stated that cryptocurrency use and currency trading are exempt from Value Added Tax.
The clarification was given to a local crypto mining company who asked for some word regarding the use of cryptocurrency in relation to tax. The agency then went on to confirm that the trading of crypto for fiat will not be taxed and also that crypto users do not need to pay income tax. In the report, a citation was given to a 2015 ruling by a European court of justice in a case regarding bitcoin.se which was a Swedish bitcoin portal as well as their moderator. The ruling decided that cryptocurrency is a means of payment and does should not be taxed. However, the Swedish tax authority overturned the judgment eventually, stating that the court did not fully understand the matter.
This is not the first time that the Portuguese government will be clarifying their stance on cryptocurrency and tax as a previous ruling has stated that cryptocurrency use is tax-free within Portugal with a 2016 document being published to that effect. However, it is a good sign that the government is willing to stick to each previous judgment and that crypto users on holders within Portugal can continue with your business tax exempt.