Portugal likely to reject “Tax Haven” status in the future
A new crypto tax policy has been proposed by the Portuguese government. The tax policy would take effect as part of the 2023 national budget. This was announced during a government-issued report published Monday, October 10.
The report is over 440 pages long and is a detailed macroeconomic strategy and fiscal policy report. In this report, there is mention of the Portuguese government setting up taxation to the tune of 28% on all crypto gains made within a year but gains made after one year of holding the crypto would be exempt from taxation. There will also be a 4% tax on crypto transfers that were meant to be free and stamp duties will be applied where applicable.
This new proposal will establish a taxation framework for crypto that is clear and equal to other industries within the country as those industries are also taxed at 28%. This all has yet to be approved by the Parliament in Portugal but the idea is definitely in line with Fernando Medina, the Minister of Finance of Portugal, and his plans for subjecting crypto to the capital gains tax laws of the country.
Portugal has seen many foreigners move to its country due to immigration options and flexible visas. The country is also more affordable than the United States and other countries of the like. Immigration into the country increased by 40% from 2011 to 2021 and currently 5.4% of the current population is from another country.
Portugal is the home of “Crypto Beach” and many crypto enthusiasts ( read fanatics) from countries such as Italy and France relocated there just to avoid taxation on their crypto. The parliament of Portugal has already denied the idea of creating a Bitcoin tax but the current administration will not let that slide.
It is not clear what could possibly happen if a tax like that were to be approved by the Portuguese government but one could assume there would possibly be a mass exodus as those who continue to want to avoid taxation find greener pastures.