According to a new report from a Portuguese news organization, the Tax Authority of Portugal will exempt cryptocurrency trading and payments from any national taxation laws. This means that transferring from but not to Portuguese crypto addresses will be overlooked both in terms of VAT and capital gains taxes.
This new law will also touch the local crypto miners who will not have to pay that additional VAT tax anymore, thus nearly doubling their efficiency.
Market experts are saying that this is a very bold move by the Portuguese tax authorities as the income that can be generated from cryptocurrencies is only going to increase in the years to come. But considering that most of the crypto hubs are located outside of Portugal, the European country could be trying to become one in its attempts to make the process as enticing as possible for international players.
The additional reasoning behind the tax cut
There are deeper economic reasons as to why Portugal has decided to exempt cryptocurrencies from VAT tax. Yes, their description of the asset as “not money” is satisfactory, but there are other reasons at play here. Reasons such as the enforcement of tax laws, which has proven to be quite difficult in multiple countries. In fact, in the country right next to them, Spain.
In conclusion, Portugal is allowing the local population to benefit from the growing industry as long as they’re willing to spend that extra cash locally. Even though they won’t get 100% of the crypto tax they would from enforcing the law on it, they will at least get 50% of it through increased corporate revenue taxes as well as a healthy economy with good consumer spending and economic growth indicators.
Furthermore, by allowing the local population to freely handle cryptocurrencies, Portugal is guaranteeing much better trade or service relationships with Gibraltar which is slowly but surely, raking in more and more crypto companies to cover the whole of the EU.
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