Portugal Makes U-Turn on Cryptocurrency Tax

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Portuguese Minister of Finance Fernando Medina said cryptocurrencies will be subject to taxation in the near future, according to comments in the nation's parliament on Friday, as reported by Sapo.

• “Many countries already have systems, many countries are building their models in relation to this subject and we will build our own,” Medina said on the taxation of crypto.

• "The government has said that [it] will move forward with the taxation of crypto," Susana Duarte, an associated partner at Abreu Advogados law firm in Lisbon, told CoinDesk. While she confirmed the new policy will include a capital gains tax, the government, she said, has not yet explained how staking or yield farming might be affected.

• Portugal was previously considered a tax haven for cryptocurrency investors, in part due to an effective capital gains rate of zero.

• "There is no specific law, it is just a lack of regulation that led to the zero taxation in Portugal," said Duarte. "This together with an understanding published by the Portuguese tax authority in 2016 meant that only crypto-related businesses can be taxed."

• As for her local clients, Duarte said there's concern, with both individual and corporate entities seeking clarification and certainty on the government's proposal.

• The current capital gains tax rate for financial investment in Portugal is 28%.

• Portugal's changed stance on taxes brings the country in line with many other nations around the globe. Among them are Australia – where earlier Monday that country's tax office warned investors of the need to report capital gains and losses on crypto each year – the United Kingdom and the U.S.