Crypto taxation in Portugal

Portugal as Crypto Friendly: Where it all started

For many years, Portugal projected an international image of being the “Crypto Eldorado” or “crypto-friendly”. Both expressions reflected the absence of a tax regime applicable to crypto assets under the national legal framework.

In 2015, the Portuguese Tax Authority (PTA) was called upon, for the first time, to issue a Binding Ruling on the subject. In that context, it clarified that cryptocurrencies, while not technically “considered currency”, could nevertheless “be exchanged, with profit, for FIAT” and that such operations could give rise to different categories of taxable income, namely:
• gains derived from the purchase and sale of crypto currencies;
• fees or commissions earned from the provision of services related to the acquisition or exchange of cryptocurrency;
• gains arising from the sale of goods or services priced in cryptocurrency.

In this context, the PTA considered that, in principle, such income could be taxed under Personal Income Tax (PIT), falling within Category B (business or professional income), Category E (investment income), or Category G (capital gains).

However, in the absence of specific legal provisions, the PTA took the position that the sale of cryptocurrency was not subject to taxation, unless due to its habitual nature constituted a business or professional activity.

Notwithstanding the merits of this interpretation in light of the then-applicable legal framework, this ruling triggered Portugal’s classification as a “tax haven” for crypto. This resulted from the market’s reading of the ruling as meaning that no taxation applied to crypto transactions, rather than the more precise interpretation that income would only be exempt when derived from the sale of cryptocurrency acquired outside the scope of an activity.

This paradigm shifted with the enactment of Law no. 24-D/2022 of 30 December (State Budget Law for 2023), which aimed at establishing a “tax framework aligned with best practices in the taxation of crypto assets”.

Crypto Taxation Post-2023: Not so Friendly Anymore?

In 2023, Portugal implemented for the first time a comprehensive legal framework addressing the taxation of crypto-assets.

The reform introduced significant changes across multiple tax fronts, namely: (i) personal income tax; (ii) corporate income tax; and (iii) stamp duty. While the stated objective was to align Portugal’s tax treatment of crypto assets with international best practices, the new framework raises questions about whether the country is still a “crypto-friendly” jurisdiction.

Against this backdrop, the evolving Portuguese approach highlights the urgent need for consistent guidance from the tax authorities, which is essential to ensure legal certainty and compliance and to safeguard Portugal’s competitiveness.

PIT Rules on Crypto Assets

The enacted rules define crypto-assets as any digital representation of value or rights that can be transferred or stored electronically through distributed ledger technology or similar systems, while expressly excluding single, non-fungible crypto-assets such as NFTs.

In terms of taxation, the reform now extends beyond capital gains to also cover other forms of income derived from activities such as mining, staking, and related operations.

Gains resulting from the sale of crypto assets that do not qualify as securities are treated as capital gains and taxed at a flat rate of 28%. The “First-In, First-Out” (FIFO) method applies and the taxable amount is determined by the difference between the disposal value and the acquisition value, net of any portion already classified as investment income.

An important development is the introduction of an exemption for gains on the disposal of crypto assets held for more than 365 days. This provision signals Portugal’s intention to balance its new approach with some measure of competitiveness, seeking to maintain its attractiveness. However, the exemption is not absolute. It does not apply where income is earned or owed by a person or entity that is not tax resident in another EU or EEA Member State, or in a jurisdiction that has entered into a double tax treaty or an information exchange agreement with Portugal. The application of this rule remains somewhat unclear, given the inherently dematerialized nature of crypto.

The law further specifies that exchanges between crypto-assets are not treated as taxable events, with taxation deferred until conversion into FIAT currency. Income generated from crypto-assets, including through delegated or off-chain staking, is classified as investment income, but where compensation is received in the form of crypto, taxation is triggered only upon their disposal, at which point the capital gains rules apply. In contrast, mining and staking activities carried out directly on-chain are classified as business and professional income. A simplified regime may apply to these activities, with a coefficient of 0.95 for mining and 0.15 for crypto-asset transactions, although such income is only recognized when converted into FIAT.

In addition to these measures, an “exit tax” was introduced for cases where a taxpayer ceases to be resident in Portugal or discontinues a business activity, in which case all crypto-assets are deemed to have been disposed of at that time. Finally, the law imposes reporting obligations on all natural or legal entities that provide custody or administration of crypto on behalf of third parties or operate trading platforms. These entities must report all transactions and identify relevant taxpayers, but enforcement may be difficult due to challenges in identifying crypto holders, the limited number of registered service providers, and the difficulty of imposing obligations on providers with little or no local presence.

Stamp Duty

Since 2023, gratuitous transfers of crypto assets in Portugal have been subject to a 10% stamp duty. The duty applies only to transactions with a Portuguese nexus: assets are considered located in Portugal if deposited with institutions based, managed, or permanently established there. For non-deposited assets, transfers on death are deemed located in Portugal if the deceased was domiciled there, while other gratuitous transfers are deemed located in Portugal if the beneficiary is domiciled there.

The taxable value is set according to the Stamp Duty Code’s valuation rules, or alternatively by an official market quotation or declared value. Transfers between spouses, civil partners, and direct ascendants or descendants are exempt.

Conclusion

Portugal’s approach to crypto taxation marks a turning point in balancing innovation and regulation. The 2023 reforms brought clarity, moving beyond ambiguity and firmly integrating crypto into the tax system.

While this framework challenges Portugal’s reputation as a “crypto haven,” measures such as holding-period exemptions show an effort to remain competitive.

The real test will be whether legislators and tax authorities can keep pace with the rapidly evolving crypto ecosystem. To remain globally relevant, Portugal must adapt its framework to technological change, international standards, and market dynamics — while preserving its appeal to investors.