Portugal is one of the most crypto friendly countries in the world. Lisbon hosted an Ethereum conference in October of 2021 and is following the global trend of NFTs, having hosted Europe’s first crypto art festival, Rare Effect in May of 2021. In the last few years, crypto companies have been on the rise in the country and changing the way the Portuguese view this industry. For example, Criptoloja was the first crypto exchange licensed by Portugal’s central bank to operate in Portugal, in October of 2021. The company now allows individuals to purchase over 90 different cryptocurrencies with euros. From being able to purchase products with a crypto visa card to favorable tax regulations on crypto, Portugal is one of the best places to be a crypto trader.
Is Portugal a Tax Haven For Crypto?
Technically, yes. Portugal does not view cryptocurrencies as an asset, but rather as a form of payment so they do not tax it as the former. Cryptocurrency is treated like any other currency, essentially. You will not be charged VAT or Personal Income Tax (IRS), as an individual. However, businesses that provide services related to cryptocurrency are taxed on gains between 28% and 35%. If you trade cryptocurrency as your primary income source (as your main profession) you will also be taxed this amount. There are many factors that determine whether this is the case like your profit and the frequency of your trade. To be sure, contact a tax advisor in Portugal.
If this is not the case for you, you can cash out your crypto into fiat currency (euro) without paying any tax. At times, Portuguese banks will contact you and ask you for a receipt or proof of exchange.
Moving to Portugal for Cryptocurrency Trading
Cryptocurrency and the Portugal Non-Habitual Residence Program
Although non-EU citizens can also be eligible for the non-habitual residence program (NHR) through the Golden Visa or D7 Visa, it is easier for EU citizens to do so. Through this program, you essentially move your tax residency to Portugal and can cash out your cryptocurrency without being taxed. The NHR program allows you to enjoy many other tax breaks for 10 years. To be eligible, you must meet these requirements:
- You must live abroad and want to move to Portugal
- You can not have been a resident in Portugal within the last five years
- You must then remain in Portugal for 183 days a year or have your primary home in the country
Besides your cryptocurrency gains not being taxed, here are some other benefits of this taxation system:
- Tax rate of 20% for employment and self-employment income from “high value-added activities” in Portugal such as scientific activity
- Employment income from a foreign source is not taxed
- No inheritance, wealth, or gift tax
We advise that you seek legal and financial advice before starting your application.
Cryptocurrency and the Portugal Golden Visa
Applying for a Portugal Golden Visa is a great route for crypto investors to take. This way, you can enjoy the tax benefits of this crypto-friendly country. Created in 2012, the Portugal Golden Visa is known as one of the most attractive visa programs in the world. The program allows non-EU citizens to qualify for a residency permit and eventually a passport in the country through investments.
With a Portugal Golden Visa, you can live in Portugal and travel within most European countries without an issue. You will also be able to monetize your cryptocurrency earnings in Portugal without being taxed under the non-habitual resident program (NHR). However, while you do need to reside in Portugal to get a Golden Visa, you should do so to take advantage of the crypto tax incentives. To become a tax resident under the NHR program, you must spend more than 183 days of the year in Portugal. Your crypto gains fall under capital gains and will not be taxed. Moreover, there is no inheritance or wealth tax, and income from “high-added activities” such as income from activities of a scientific, artistic, or technical character performed in Portugal are taxed at 20%.
You will need to make an investment to apply for the Portugal Golden Visa. There are plenty of investment options such as purchasing real estate, the most common. A lot of people do not know this, but you can actually purchase real estate with bitcoin and other cryptocurrencies through intermediaries and thus qualify for a golden visa. You can also qualify for any of the investment options with crypto visa cards. Not only can you use crypto to qualify for a Portugal Golden Visa, but you will also benefit from the Portuguese system as a trader in the long run.
We advise that you seek legal and financial advice before starting your application. See our full guide on how to get a Portugal Golden visa here.
Cryptocurrency and the Portugal D7 Visa
Also known as the Portugal passive income visa, the Portugal D7 Visa is a popular way in which cryptocurrency investors move to Portugal. The Portugal D7 Visa gives residency status to non-EU individuals, including retirees, who want to move to Portugal and have a regular passive income. You must prove that you have passive income, derived from a pension, rental, dividend, or investments. Here are the passive income requirements to be eligible:
- The main application must make at least 100% of the minimum wage (€8,460 per year as of Jan 2022)
- For the spouse or parents of the main applicant, you need at least 50% (€4,230 per year as of Jan 2022)
- For the dependent children of the main applicant, you need at least 30% n (€2,538 per year as of Jan 2022)
- Therefore, for a couple with one child, you would need around €15,300 a year to be eligible for the D7 Visa.
This visa not only gives you the right to live in Portugal, but after five years of residence, you can also apply for Portuguese citizenship. We advise that you seek legal and financial advice before starting your application.
Frequently Asked Questions About Crypto In Portugal
Is crypto legal in Portugal?
Yes. Although it is not recognized as fiat currency, like the euro, you can legally trade crypto in Portugal. You can also cash out crypto into euros. It does not, however, have legal tender status, such as the euro, meaning it is not recognized by the government as a means to settle public debt and pay legal fines, for example.
Is Bitcoin legal in Portugal?
Yes, Bitcoin is legal in Portugal, as are all cryptocurrencies.
Is there a Bitcoin ATM in Portugal?
This one might sound like an urban myth, but yes. You can find a Bitcoin ATM in Portugal. However, these are very rare. You can find a couple in Lisbon and Porto.
Can you buy things with Bitcoin in Portugal?
You can purchase things with Bitcoin in places that would not necessarily accept the cryptocurrency using a bitcoin credit card. There have also been instances of people purchasing properties with cryptocurrencies such as Bitcoin, as well as Dogecoin, Ethereum, and Cardano in Portugal as Swiss crypto payment processor FNTX Capital Suisse partners with Portuguese property developer 355 Developments. Others are following in their footsteps. For example, the sports team Benfica accepts Bitcoin as payment for ticket purchases.
Portugal and crypto tax: is crypto tax-free in Portugal?
Yes. The Portuguese Tax & Customs Authority (PTA) officially announced in 2019 that buying or selling cryptocurrency in Portugal is tax-free. You will not be charged VAT or Personal Income Tax (IRS), as an individual. However, businesses that provide services related to cryptocurrency are taxed on their gains. Contact a tax advisor if you are unsure whether this applies to you.
Will crypto always be tax-free in Portugal?
Probably not. There are multiple political parties wanting to extend Portugal’s regular taxation system to crypto. However, in the near future, crypto will remain tax-free in Portugal.