Portugal Crypto Tax: The Ultimate Guide

For many years, Portugal was one of the most crypto-friendly countries, with crypto not being taxed, while the 2023 “Orçamento de Estado” is introducing new crypto tax laws in the country.

Portugal’s members of parliament have approved a new special law in the general state budget for 2023 to target cryptocurrencies, imposing a new 28% tax, among many other tax changes and reporting obligations for next years.

In this guide, we’ll explore how crypto is taxed in Portugal, how you report it, how much you will pay for crypto gains, staking, other crypto activities, and much more!

How are cryptocurrencies taxed in Portugal?

According to the Portuguese tax Authority (“Autoridade Tributária e Aduaneira”), cryptocurrencies can be taxed under three categories from the country’s tax code:

• Category A (“Salaries”) – For example, salaries paid in cryptocurrencies (“Trabalhadores Dependentes”)
• Category B (“income”) – For example, crypto income paid to freelancers (“Trabalhadores Independentes”)
• Category G (“Capital gains”) – For example, as profits from the sale of real estate or assets
• Category E (“Interest/Yield”) – For example, interest or investment funds 

Let’s cover in more detail how the different crypto activities fall into each category. 

Do you have to pay tax on crypto in Portugal?

Portugal approved a new crypto tax law amid the 2023 state budget, taxing crypto gains under Category G (“Capital gains”) at 28% if you held your crypto for less than 365 days.

Portuguese citizens can choose to be taxed at 28% on their gains or to incorporate their crypto gains into their total income for the year and be taxed according to the ordinary income tax brackets in the country.

If your total income (including gains) surpasses the last income tax bracket in Portugal, you’d be obligated to aggregate your crypto gains, and they would be taxed at the ordinary income tax rates instead of 28%.

Here are the income tax brackets in Portugal for 2024:

• Until 7,703€ – 13,25%
• From 7,703€ to 11,623€ – 18%
• From 11,623€ to 16,472€ – 23%
• From 16,472€ to 21,321€ – 26%
• From 21,321€ to 27,146€ – 32.75%
• From 27,146€ to 39,791€ – 37%
• From 39,791€ to 51,997€ – 43,5%
• From 51,997€ to 81,199€ – 45%
• Over 81,199€ – 48%

However, the new crypto taxation in Portugal has a benefit for long-term investors by not taxing crypto gains from assets held for over 365 days.

Are crypto-to-crypto trades taxed in Portugal?

With the new crypto tax changes in Portugal, any crypto-to-FIAT (e.g., crypto to Euros) is taxed at 28%, with crypto-to-crypto trades not being taxed under the new regime.

Investors can buy any crypto with FIAT, do as many crypto-to-crypto trades as they want, and then convert to FIAT, with taxes occurring at the time of that final conversion from crypto to Euros.

How much tax do you pay on crypto?

Let’s look at an example of how a crypto trade is taxed in Portugal.

Imagine that Carlos bought 1 Bitcoin for $25K in February 2023. He will sell it for $35K in June 2024. 

His capital gains would be $10K ($35K-$25K), but his gains are tax-free since he held his Bitcoin for over 365 days.

What if he sold in December 2023? Let’s imagine that Bitcoin is worth $30K at that time.

In that case, his capital gain was $5K ($30K-$25K) taxed at 28%, resulting in $1,400 in taxes if he chooses not to incorporate his crypto gains into his total income for 2023.

Are you taxed when converting crypto to euros or when sending to your bank account?

The payment of tax or the taxable event is when crypto is converted to FIAT (e.g., EUR). If you did that conversion but kept Euros in your wallet, you still had a taxable event.

Do I need to declare crypto in Portugal?

From 2024 onwards, Portuguese residents will have to report their crypto gains and income when filing their regular taxes.

Your 2024 tax return will reflect the gains and operations registered during 2023, the year when cryptocurrencies started to be taxed in Portugal.

How to report crypto taxes in Portugal?

In Portugal, you have to file your “Modelo 3” (income tax return) to report your income for the year, including cryptocurrencies and some extra tax forms, depending on the nature of your crypto gains/income. You do so online at “Portal das Finanças.”

For example, “Anexo G” contains the gains from your crypto trading activities, while “Anexo E” represents income from staking activities.

When do you file crypto taxes in Portugal?

In Portugal, you can file your tax return between April 1 and June 30, including the extra tax forms to report your crypto activities. If you file early, you might receive (if you’re entitled to) your tax return earlier as well.

Which accounting method should you use for crypto in Portugal?

The new crypto tax rules in Portugal state that FIFO (“First-In, First-Out”) should be the accounting method used to calculate your capital gains from crypto trading. 

How was crypto taxed in Portugal until 2023?

In 2016, the Portuguese tax authorities issued a statement outlining why cryptocurrencies did not fall under the three possible income tax categories.

Crypto gains in Portugal have been tax-free until the recent state budget approval unless you were conducting professional/business activities around crypto.

A lot of crypto investors moved to Portugal, given its status as one of the most crypto-friendly countries in the world.

Is Portugal taxing crypto at 50%?

Before the new state budget was approved, the Portuguese Tax Authority (“Autoridade Tributária) proposed that cryptocurrencies would be taxed between 28% and 50%. This was an official recommendation from the tax authority, but the final decision fell under the government and the parliament.

Despite this recommendation, the government decided to tax crypto at a special rate of 28%, including a long-term benefit, creating a more friendly approach to crypto taxes.

What is the trading tax in Portugal?

Capital gains in Portugal fall under “Category G,” which can be taxed at 28% or according to the regular income tax rates if citizens wish to be taxed progressively (“englobar rendimentos”).

How are NFTs taxed in Portugal?

The new crypto tax laws in Portugal exempt any taxes from operations involving Non-Fungible tokens (NFTs).

If you have gains from trading NFTs (NFTs-to-NFTs or crypto-to-NFTs), you wouldn’t have to pay taxes on those.

How is staking taxed in Portugal?

Crypto interest and staking rewards will be taxed under “Category E“ of the Portuguese tax code, leading to a fixed 28% tax rate for the income received.

You need to determine the Fair Market Value (in Euros) at the time you received the crypto income, while that amount is taxed at 28%. 

How is crypto mining taxed in Portugal?

According to the new crypto tax rules in Portugal, crypto mining will fall under “Category B,” resulting in income taxes according to your total taxable income bracket for the tax year.

Am I taxed if I make a purchase with cryptocurrencies?

Yes, if you buy a product or service with cryptocurrencies, it would be considered the same as the disposal of your crypto asset, incurring in the capital gains scenario if you haven’t held it for over one year.

Hence, if you buy something with crypto, you’d have to calculate your gains or loss for the amount you’re spending and then later report it on your taxes if it was held for less than one year. 

If the crypto you’re using for the purchase was held for over one year, it would be tax-free.

Do I have to report crypto losses in Portugal?

Yes, if you have losses from crypto trading, you’d have to report those losses in your “Anexo G,” and those could be carried forward for five years. This means that when you have a positive capital gain (in subsequent years), it will be reduced to account for the previous year’s losses. 

What happens if I don’t report my crypto taxes in Portugal?

As in other countries, if you don’t file your tax return, including your crypto gains/income, you’d face penalties.

How do I avoid crypto tax in Portugal?

The best way to avoid crypto taxes in Portugal is to hold your crypto purchases for over 365 days and enjoy a tax-free rate on your crypto gains instead of falling into a short-term capital gains tax scenario, where you are taxed at 28%.

There are few countries where crypto gains are not taxed, making Portugal still a crypto tax haven for investors.

If you earn crypto and are taxed under the regular income tax brackets in Portugal, you have other opportunities to deduct expenses to lower your total income tax bill.

Which bank is crypto-friendly in Portugal?

For years, many Portuguese citizens reported instances of transfers from Portuguese banks to crypto exchanges being blocked or red-flagged. At some point, some banks stated they wouldn’t support clients who wanted to transfer funds to crypto platforms. The situation seems to be resolved now.

Recently, the Portuguese banking regulator “Banco de Portugal” issued its first license to Bison Bank, enabling people to securely buy and sell Bitcoin and Ethereum with a fully-regulated institution.

However, you can use any of the banks operating in Portugal to transfer funds in and out of crypto platforms, including Montepio, Millennium BCP, Novo Banco, Santander, Bankinter, BPI, and more.

Which EU country is most crypto-friendly?

Portugal remains one of the crypto-friendly countries in the EU, given its long-term benefit for crypto holders, enabling you not to pay crypto taxes. 

Portugal’s tax code for cryptocurrencies is inspired by the German code, which is also one of the most crypto-friendly countries, with gains over one year being tax-free.

Other countries in Europe, like Malta, Cyprus, Switzerland, and Belarus, are also some of the best crypto tax havens. Discover more crypto-friendly countries worldwide.

The best Portugal crypto tax software: CoinTracking

The best crypto tax tool for Portuguese investors is CoinTracking.

With CoinTracking, you can import your trades from leading exchanges, determine your gains, generate tax reports, and more:

• Import your trades from 110+ exchanges.
• Support for DeFi and NFTs
• 25+ advanced reporting features
• 12 accounting methods (e.g., FIFO, LIFO, HMRC, ACB) for your gains calculation
• Generate tax reports

Crypto taxes done-for-you in Portugal with Full-Service

CoinTracking also offers a Full Service for Portuguese traders. A crypto tax expert from Royal Nomads will review your CoinTracking account, help fix any errors, and ensure you submit your tax reports error-free.

Disclaimer: All the information provided above is for informational purposes only and should not be considered as professional investment, legal, or tax advice. You should conduct your own research or consult with a professional financial advisor when investing.