Project Description

Introduction

Portugal has long been considered one of the most attractive destinations for crypto investors in Europe. Its favorable climate, safety, developed infrastructure, and lenient tax regime have made the country particularly popular among traders and digital nomads.

From 2020 to early 2023, the country was effectively considered a “tax haven” for digital asset owners. The lack of clear regulation allowed most private cryptocurrency transactions to proceed tax-free, creating an ideal environment for long-term investors and active traders.

The situation changed in 2023, when authorities introduced new regulations to align the system with European standards and adapt to the rapid growth of the market. Below, we’ll explore how tax policy regarding crypto assets has changed, what is required for compliance, and why Portugal remains a favorable jurisdiction.

  • From a liberal approach to strict regulation

    Until 2023, the Portuguese Tax Agency (AT) did not recognize income from crypto assets as taxable, effectively exempting most private transactions from tax.

    This approach made the country a magnet for crypto enthusiasts.

    The growth of DeFi and increasing trading volumes prompted the government to overhaul the system. As a result, a new tax regime for digital assets was approved, beginning with the 2023 budget.

  • New Tax System (from 2023)

    Main Changes:
    • The sale of cryptocurrencies held for less than 12 months (365 days) is taxable.
    • Basic rate: 28%.
    • If total income exceeds €83,696, cryptocurrency gains must be included in total income and taxed at a progressive rate of 13%–48%, plus a possible solidarity surcharge:
    • 2.5% for income over €80,000;
    • 5% for income over €250,000.
    • If income is below this threshold, you can choose between a flat rate or inclusion in total income. For smaller incomes, inclusion is often more advantageous.

    Long-term investments (more than 365 days) are tax-exempt if the sale occurs within the EU/EEA or in a country with a tax information exchange agreement. Transactions with offshore jurisdictions (e.g., the Cayman Islands) are not exempt.

  • Transaction Declaration

    Investments and Private Trading (Category G)
    • <365 days → 28% tax or progressive rates.
    • 365 days → exemption (subject to conditions).
    • Crypto-crypto exchanges are currently not taxed, except for income from airdrops or staking.

    Staking and Lending
    • Staking tokens are considered capital gains and are taxed at 28% upon receipt.
    • Lending and yield farming → similar, but taxation may shift at the time of token sale.

    Professional activity (category
    • Mining and professional trading are considered business income.
    • Progressive IRS rates (13–48%) and a possible solidarity surcharge apply.
    • 95% of mining income is included in the tax base.
    • 1.15 — for income from cryptoasset transactions (trading).

    • For turnover exceeding €200,000/year, switching to an organized accounting system is mandatory.

    Transaction tax (Imposto do Selo)
    • 4% on crypto service fees in Portugal.
    • 10% on gratuitous receipt of cryptoassets (airdrops, gifts), if the amount exceeds 500 €.

    Payment is made monthly and separately from the IRS.

    Legislative Framework
    • IRS Code (Articles 10, 22, 68–72, 78).
    • Lei n.º 24-D/2022 — established a new tax regime for digital assets.

    Reporting and Deadlines
    • IRS Declaration (Modelo 3): from April 1 to June 30.
    • Payment: by August 31.
    • Late penalties: from €150 to €3,750; penalties for voluntary filing within 30 days are lower (€25–€112.50).

    European Context

    The MiCA (Markets in Crypto-Assets) regulation, which came into effect at the end of 2024, has strengthened oversight of crypto services by establishing strict licensing and transparency rules.
    Where to declare income (Modelo 3)
    • Anexo G — transactions through Portuguese intermediaries.
    • Anexo G1 — long-term transactions (>365 days) through local intermediaries.
    • Anexo J — transactions through foreign intermediaries (excluding NIF).
    • Anexo B — income from professional activities.

With the entry into force of MiCA, it’s important to closely monitor updates to the law.

Asset management remains with the client, while we handle tax matters. Our company provides comprehensive support: we provide detailed consultations, explain current legislation and the specifics of cryptocurrency taxation in Portugal, guaranteeing transparency and full compliance with regulatory requirements.