Portugal Could Be a Tax Haven — Not Only for Crypto Traders
Or Lokay Cohen's original article for cointelegraph.com reduced by 54%
The Portugal Tax Authority announced last month that cryptocurrency trading and payments in crypto would not be subject to value-added tax. This announcement follows another Portuguese tax benefit for cryptocurrency traders: Ruling 5717/2015, which declares that proceeds from the sale of cryptocurrencies for individuals will be tax free. According to the ruling published in February 2018, the sale of cryptocurrencies does not qualify as capital gains if the tokens are derived from the sale of financial products as defined in Portuguese law, which are normally subject to a 28% tax rate.
Cryptocurrency trading will not be considered investment income, which is also subject to a 28% tax rate under other circumstances. These significant tax benefits are reserved for nonregular tax residents in a bid to attract high-value professionals from all over the world. These high-value, nonregular groups enjoy a 25% rate on income taxation, avoid a tax of up to 48% that is applied to other resident groups, and pay a 28% tax rate on dividends, capital gains and investment income - which is why the Portuguese government including cryptocurrency investors and traders comes as no surprise.
A person who becomes a tax resident in Portugal and has not been taxed as a resident in Portugal for the previous five years may apply for the special tax regime for nonhabitual tax residents.
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