No tax levied for cryptocurrency trading and payments in Portugal

Jornal de Negócios - a Portuguese business newspaper - reported that the country's Tax and Customs Authority had exempted crypto transactions and payments from Value Added Tax (VAT). The agency also published an official ruling document where the authority stated that the exchange of crypto for fiat money is free of VAT. They also added that crypto users do not have to pay any income tax for income generated from the sale of crypto.

In the official statement, the Portuguese tax authority cited a 2015 ruling by the European Court of Justice regarding the case regarding major Swedish Bitcoin (BTC) portal Bitcoin.se and its moderator David Hedqvist. Reportedly, the court had mandated that Bitcoin is a means of payment the exchange should, therefore, be exempted VAT obligations. The Swedish Tax Agency disagreed with the ruling, claiming that the court did not fully understand the matter.

In 2016, the Portuguese tax authority published a document that explained that income from the sale of crypto in Portugal is not subject to income tax. Earlier In 2013, the Banco de Portugal, the central bank of Portugal, released a statement citing a 2012 crypto-related paper by the European Central Bank. The Portuguese bank was worried over the ECB’s Bitcoin recognition as a “phenomenon of innovation in virtual currency models.” They felt that Bitcoin could not be considered a safe currency as regulated entities do not issue it.