Many Golden Visa applicants will be disappointed to learn that Portuguese Finance Minister Fernando Medina has announced that his country would begin taxing Bitcoin, but has not given a specific timetable.
The small Iberian country is about to reverse a long-standing tax provision that exempted cryptocurrency gains because they are not legal cash.
On May 13, Secretary of State for Tax Affairs António Mendonça Mendes seconded the move to tax crypto. Sapo, a local news outlet, reported this.
Reversing the Tax Law
However, there is no specified commencement date or rate for the tax. It will impose on investment gains made from cryptocurrencies such as Bitcoin (BTC), which has the greatest market capitalization. This would be in direct opposition to the 2016 tax law. Gains on crypto cannot tax because it is not legal tender.
Medina explained his reasoning for the tax during a working session in Parliament, comparing Portugal to countries that already have systems. Additionally, according to Sapo, Medina stated that an asset that generates capital gains should not be taxed. He stated that there cannot be gaps that result in capital gains in transactions involving assets that are not taxed.
Medina does not appear to be planning to tax crypto earnings at a high rate. He stressed the importance of developing and implementing a taxation structure that is adequate. However, it does not achieve the stated goal of reducing revenue to zero.
More Complicated than Others
Mendes stated at a Parliamentary working session that bitcoin taxes is more challenging than most other assets. It’s because cryptocurrencies and crypto assets have no uniform definition.
He went on to say that they are reviewing what regulations apply to this situation. They can present a legislative initiative on the front page of a newspaper in this fashion. A legislative effort, on the other hand, that actually helps the country in all of its aspects.
Crypto Tax Haven
Until now, Portugal views as a crypto tax haven that gives the Golden Status, a perpetual residency visa. That is because it provides holders with particular tax benefits as well as a path to citizenship. The Golden Visa scheme creates to encourage international investment. Anthony Sassano, an industry observer, saw the funny side.
In February, an emigrant to Portugal commended the country’s high rate of cryptocurrency adoption among shops. In an interview, he even hinted that Bitcoin might become legal tender there one day. However, now that the crypto tax law is going to reverse, he may have a lot to think about.
