The Portuguese has rejected two separate proposals to tax digital assets, but the days of tax-free crypto may be coming to an end.
The proposals by left-wing parties Bloco de Esquerda and Livre were voted down, but the ruling Socialist Party (PS) plans to tax crypto in the future.
“In 2022, the Government adopts the necessary initiatives to establish a tax declaratory obligation on cryptocurrency assets with a view to taxing their capital gains from the minimum threshold of 5,000 euros,” the party said.
Portugal becomes yet another country to contend with taxing crypto. Similar discussions are happening all across the world, with some countries, like India, already having firmly established a tax scheme.
At present, there is no capital gains tax on crypto in Portugal. The government will obviously seek to change that to impose some control and ensure that they get some revenue.
Portuguese government proposes new tax model
The Portuguese Minister of Finance Fernando Medina has said that the country will build its own model of taxation for crypto.
Portugal has been fairly liberal when it comes to digital assets. The Central Bank of Portugal has granted licenses to crypto exchanges, and an apartment was bought for three bitcoins earlier this month.
The decision to regulate the crypto market is a difficult one for governments. The market is firm, and rules that can be enforced elsewhere are difficult to apply to crypto.
While governments design a regulatory framework, they have decided to tax crypto in the meantime, which has led to some control over the market.
India has one of the toughest stances on crypto taxation, and it may get even tougher. Others are taking a less aggressive approach, but nonetheless are keen on raising taxation.
The next few years will see much change happen in the crypto market, both at the regulatory and infrastructure level. As such, investors will want to ensure that they are abiding by the rules.
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