In this country, individuals and investors are benefiting from a lack of legislation on cryptocurrencies.
In a short time, Portugal has become the new tax haven for cryptocurrency investors.
“With 0% tax on cryptocurrency investments, Portugal has a perfect system,” explains Didi Taihuttu, a Dutchman who settled in this Iberian country to take advantage of a legal vacuum that limits the tax on these virtual assets. “It’s a Bitcoiners’ paradise,” said the 40-year-old, who became famous for making a fortune investing all his savings in this technology created fifteen years ago, during a telephone interview with AFP.
After radically changing his life five years ago, this father has now settled in the south of Portugal, where he wants to found the first “crypto village in Europe”, with the first construction of 25 houses intended to welcome “bitcoiners”. . from all corners of the world.
For investors like him, “Portugal has become very attractive due to the lack of legislation in this area,” explains Susana Duarte, a lawyer with the firm Abreu, which for this reason is experiencing a growing demand from foreigners who want to settle in Portugal.
Under Portuguese law, transactions in cryptocurrencies (bitcoin, ethereum, solana, dogecoin, etc.) are “not taxable” because they are not considered currencies or financial assets, according to a tax authority advice in 2016.
Individuals do not have to pay VAT or capital gains tax when buying and selling assets, and only professional activities that are rewarded in crypto assets are taxed.
“Very Fluid” Load
Like Malta in particular, Portugal is thus an exception in Europe, at least for the time being, as the Lisbon government, a socialist government renewed by a comfortable majority last January, acknowledged that it must eventually investigate the matter.
Until further notice, his position is to wait for the adoption of a “common strategy” at European level, the State Secretary for Fiscal Affairs Antonio Mendonça Mendes told the weekly Expresso before the elections.
“Portugal is one of the destinations that attracts Europeans, with a very very low tax on crypto. On the other hand, we don’t necessarily recommend it because it is not a long-term strategy for the government to attract companies from the sector, but rather a legal vacuum,” confirms a London-based tax attorney, who wishes to remain anonymous for his advice to fortunes in cryptocurrencies.
“I bet the city will be smoother than Portugal in ten years,” he adds, while the United Kingdom is one of the European countries aiming to become the homeland of cryptocurrencies in the old continent, as the British treasury has announced in early April. announced that it is about new, more flexible regulations for this sector.
Risk of “bubble”
“Portugal has become a tax haven,” laments Mariana Mortagua, deputy of the Left Bloc (far left), calling for urgent regulation.
“It is hard to justify taxing other financial assets at about 28% and not on cryptocurrencies,” also admits Pedro Borges, head of Criptoloja, the first digital asset trading platform registered with the Bank. from Portugal.
Concerned that the crypto asset market has reached the size of subprime mortgages, which sparked the last major financial crisis, the European Central Bank (ECB) has called for international regulation.
Regulators must “act faster” to ensure crypto assets “do not cause an anarchic risk-taking frenzy,” synonymous with a “bubble,” said ECB Governing Council Fabio Panetta this week.
But for Didi Taihuttu and his “bitcoin family”, Portugal would make “a mistake” if it changed the legislation he believes offers a unique opportunity for development.
According to the Dutch investor, this country could be the global “nerve center” of digital currencies for companies in the blockchain sector, the technology at the heart of creating and using cryptocurrencies.