Portugal For Crypto Traders: Complete Guide To Cryptocurrency Taxation in Portugal

Portugal For Crypto Traders: Complete Guide To Cryptocurrency Taxation in Portugal

Portugal For Crypto Traders: Complete Guide To Cryptocurrency Taxation in Portugal

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Portugal’s tax-free bitcoin policies are attracting a lot of attention. The country has announced numerous incentives over the years, and cryptocurrency dealers and miners currently benefit from Portugal’s crypto-friendly environment. In the country, bitcoin earnings are exempt from VAT, and cryptocurrency businesses face fewer legal and regulatory barriers than in other countries.

Portugal sets a great example for other European countries with its crypto-friendly policies. It encourages international businesses and investors by allowing them to profit from cryptocurrencies without having to pay taxes on them.

Portugal is A Stable Economy For New Investors

Portugal is one of the top ten most attractive countries in Europe for foreign direct investment, according to Ernst & Young’s research. According to the same report, 50% of investors feel that Portugal will become more appealing in three years. Investors intend to extend their activities in the country in 37 percent of cases.

Aside from that, Portugal has long been a popular destination due to its safe and tranquil environment. It is the fourth safest country in the world, and the third safest in Europe, according to the Global Peace Index. In the Expat Exchange’s Best Places to Live in 2022 Survey, Portugal is ranked top.

With all of the economic activity and technology buzz in Lisbon and Porto, Portugal is establishing itself as one of Europe’s most economically innovative nations. Portugal has created investment incentives to entice high-net-worth people and professionals to relocate to the country. Two major draws are the Portugal Golden Visa and the D7 Visa. As a result, the economy and real estate market has expanded, and this trend is projected to continue in the future, thanks to favorable bitcoin rules.

Bitcoin Tax in Portugal

Cryptocurrency transactions in Portugal are VAT-free since the country considers cryptocurrencies to be a method of payment rather than an asset. The Portuguese currency is the Euro, yet crypto traders and investors may be paid in cryptocurrency and pay for products with crypto visa cards – it’s a win-win situation.

Tax on Income Generated from Cryptocurrency

Gains from the purchase and sale of cryptocurrencies, like any other currency, are not subject to taxation. Companies that supply cryptocurrency-related services, on the other hand, face capital gains taxes ranging from 28 to 35 percent.

If you don’t trade bitcoin on a regular basis, you might be able to avoid paying taxes. Please keep in mind that if you trade bitcoin for a living, you must file a tax return and pay taxes on your gains.

Here are some factors to consider when deciding whether or not your trade activity will be regarded as a profession:

  1. The frequency with which you trade (daily, weekly, or monthly).
  2. The holding period of financial products.
  3. The number of trading platforms you use.
  4. The amount of money you make.
  5. The primary source of income for you.

You won’t be considered a professional trader just because you possess one of the criteria listed above. However, discussing with a tax lawyer will be beneficial because your situation may be unique.

How Can You Move to Portugal as a Crypto Trader?

If you want to work as a crypto trader in Portugal, you have a few possibilities. Portugal Golden Visa and D7 Visa are the most popular options.

Cryptocurrency and the Golden Visa of Portugal

Non-EU citizens are granted residency in Portugal via the Portugal Golden Visa scheme and are only eligible for citizenship after five years.

This program enables investors to get residency and citizenship in Portugal by making a qualifying investment. The Golden Visa for Portugal allows you to travel, study, and work in the country.

The Golden Visa of Portugal is particularly appealing to bitcoin dealers who want to protect their capital while still having resident privileges. Portugal is an excellent Plan B for their investment as well as their family.

Cryptocurrency and the D7 Visa in Portugal

Another popular option for crypto investors looking to relocate to Portugal is the D7 Visa. The Portugal D7 Visa, commonly known as a passive income visa, allows you and your family to live in Portugal. You may be qualified for a D7 Visa in Portugal if you have income from pensions, transferable equity, or real estate.

After five years of residence, you can petition for Portuguese citizenship.

It’s important to keep in mind that the application process for both the Portugal Golden Visa and the D7 visa demands caution, especially if you’re seeking to relocate for tax reasons. Before making any plans or commitments, you should consult a specialist for further information.

Cryptocurrency and the Non-Habitual Resident (NHR) Program in Portugal

If crypto traders and investors have not been tax residents in Portugal for the past five years, they can take advantage of the non-habitual tax regime. Under the non-habitual resident program, you can monetize your cryptocurrency earnings in Portugal without being taxed.

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