Discover the essential Portugal Crypto Tax Guide: Understand tax regulations, reporting requirements, and obligations for cryptocurrency transactions in Portugal. Stay informed and ensure compliance with this comprehensive guide.
Written byDeepak Pareek · Head of Tax & Accounting - Kryptos
● Main focus of this memo should be on individual taxpayers trading crypto as a hobby (not acting in a professional manner as traders or similar). Where context requires, feel free to draw a comparison between crypto hobbyists and professional traders (e.g. mining income)
● Assuming the individual taxpayer is a single resident of the respective country (hence, dual resident cases are out of scope)
● When citing relevant laws/guidance/caselaw, please insert citations in footnotes.
● Try to write clear, concise sentences, using plain language and providing as many simple numerical examples as possible.
● It is likely that some questions will not be applicable or that your jurisdiction does not have any specific guidance (e.g. DeFi). In this case, simply put: n/a
● VAT and corporate tax issues are out of scope of this exercise
Table of content
1. Short introduction
2. Applicable legal sources
3. Upcoming legislation or guidance
4. Type of taxes
5. Crypto asset definition
6. Accounting method used for tax calculation
7. Type of allowable costs/expenses
a. Which costs are allowed (i.e. deductible) in your jurisdiction for reducing the final tax liability? FIFO profit = Selling price – purchase value – costs (transaction fees/exchange fees).
1. Short introduction
Receiving crypto as a form of payment and full-time crypto traders, have been taxed since 2015. As of year 2023, validating, staking, yield farming, crypto capital gains (holding period less than 365) are taxed. NFT´s and any NFT related capital gains are still completely out of scope as of 2023. Crypto-to-crypto is not taxed and stable coins are considered the same as other crypto currencies. Tax is only paid when any of the crypto currency assets are sold for a fiat currency. If the resident decides to cash out in Dollars, he will have to declare the equivalent in Euro´s.
2. Applicable legal sources
Please list here relevant crypto tax laws and guidance and provide links or pdf documents where available. Please cite and describe any other relevant sources, especially any available caselaw.
THE FINAL DRAFT– The translation is added as a separate document.
FICHA DOUTRINÁRIA - Taxation of cryptocurrencies or virtual currencies (2026
Please cite and describe any other relevant sources, especially any available caselaw.
3. Upcoming legislation or guidance
Please describe whether there is any new crypto tax legislation/guidance announced in your jurisdiction. If yes, please cite and provide relevant sources and links.
As we are in the beginning of the year, regulations regarding 2024 has not been discussed yet. 2023 brought us new regulation and the government made the rules, but the right software to declare is not yet in place on the government supported websites.
4. Type of taxes
Which taxes may potentially apply, e.g. capital gains tax, personal income tax etc.?
Portugal has the following general person income (IRS) categories of importance for Crypto:
Category B: Independent worker, contractor.
Transactions involving the issuance of crypto assets, including mining, or the validation of crypto assets transactions through consensus mechanisms, shall be considered commercial and industrial activities, taxed accordingly.
For the purposes of the simplified taxation regime, the taxable income is computed by applying the coefficient of 0.15 to the sales of crypto assets that are not capital gains/ airdrops /staking rewards /NFT rewards. The coefficient is 0.95 in the case of PoW mining of crypto assets like Bitcoin & Dogecoin.
Income derived from the above transactions is deemed realized on the moment of the transfer of the crypto assets for a consideration. Both the termination of the activity and the loss of Portuguese residency are equivalent to transfers for a consideration.
Category E: Investment income other than capital gains
Any type of remuneration derived from transactions involving crypto assets qualifies as investment income (Category E) for PIT purposes. Staking rewards fall under category E
No withholding tax needs to be levied on this remuneration.
In case the income is regarded as crypto assets, taxation occurs considering it as a capital gain (Category G) on the moment of the transfer of the crypto assets received.
Category G: Capital gains
The loss of residency in the Portuguese territory is in this case equivalent to a transfer for a consideration.
The taxable gain corresponds to the difference between the sales proceeds (presumably the market value at the time of the transfer) and the acquisition value, net of the amounts qualifying as investment income. Necessary and effective expenses incurred with the acquisition and transfer are deductible.
For the purpose of assessing a capital gain or a capital loss, the crypto assets transferred are those acquired longer (FIFO - First In, First Out).
The positive balance between capital gains and capital losses is subject to a flat rate of 28%. The taxpayer can opt to aggregate the amount to the remainder income and have it taxed at progressive rates.
If a negative balance is assessed following a transfer of crypto assets, this capital loss can be carried forward for 5 years, when the taxpayer opts to aggregate its income.
The balance assessed is disregarded for the purpose of the mandatory aggregation applicable to capital gains derived from securities held for less than 365 days, earned by taxpayers with taxable income of an amount equal or higher than the last bracket of the progressive rates, which shall enter into force in 2023.
Gains arising from the transfer for a consideration of crypto assets held for 365 days or more are excluded from taxation. Losses are also disregarded. In the case of crypto assets acquired prior to 1 January 2023, on the computation of this period of time it is relevant the holding period that has already elapsed.
No taxation arises on crypto assets held for less than 365 days whose consideration on a transfer is also crypto assets. The acquisition value of the crypto assets received is the same as that of the crypto assets delivered.
Both the above exclusions from taxation are not applicable if the taxpayers or the paying entity are not tax resident in another Member State, or in a State member of the European Economic Area or in another State with which a convention for the avoidance of double taxation, or a bilateral agreement or a multilateral agreement is in force and foreseen the exchange of information for tax purposes.
There is a new reporting obligation for natural or legal persons, organizations and other entities without legal personality, all providing services of custody and management of crypto assets on behalf of third parties, or managing one or more platforms for the negotiation of crypto assets. They are required to comply with this obligation up to the end of January each year.
Do any other public levies apply, e.g. stamp duties, transfer taxes, withholding tax etc.?
There is no withholding taxes on crypto. Airdrops and inheritance are taxed by stamp duties.
5. Crypto asset definition
In short, how are crypto assets legally defined in your jurisdiction? Does the legislator make any difference between different types of crypto assets (e.g. payment, utility or security tokens)?
It includes all digital representations of values or rights that can be transferred or stored electronically using distributed ledger technology or similar. Unique and non-fungible crypto assets are excluded.
Is there any specific tax treatment for other digital assets, e.g. NFTs, stablecoins?
Stablecoins are considered crypto assets in the same way as Bitcoin and Ethereum. Non-Fungible Tokens (NFTs) are excluded of regulation as of 2023 IRS.
6. Accounting method used for tax calculation
Which accounting method is required/recommended for tax calculation: FIFO, LIFO, average-cost?
Only FIFO is allowed.
7. Type of allowable costs/expenses
a)Which costs are allowed (i.e. deductible) in your jurisdiction for reducing the final tax liability? FIFO profit = Selling price – purchase value – costs (transaction fees/exchange fees).
i.) Blockchain transaction fees
ii.) Centralized Exchange transaction fees
iii.) Professional costs to draw up a contract for the acquisition or disposal of the tokens costs of making a valuation or apportionment to be able to calculate gains or losses
Only fees associated with buy or sell are deductible, whereas fees for transfer of crypto between wallets or gifting crypto etc. are not deductible. Correct!
b.) Transaction fees - what are the tax implications of settling transaction fees
i.) in case a fee is in fiat currency
ii.) in case a fee is in crypto currency: E.g. in some jurisdictions, paying a crypto fee for purchase/sale/swap of crypto usually has two implications: 1. crypto fee is treated as an exchange of crypto for a service (usually capital gain calculation is triggered) and 2. crypto fee is included in the cost basis of the initial transaction or it reduces the selling price.
8. Crypto events
- Below you will find a list of the most common crypto transactions.
- Please indicate the tax status of these transactions, e.g. whether it is considered for tax purposes or not, and other details where necessary (usually simple yes or no will be sufficient).
- Add simple examples
- Feel free to add or describe any other crypto event that may be relevant for your jurisdiction.
A. Holding of crypto: Does mere holding of crypto give rise to any tax?
Holding of crypto is not taxed, unless you decide to leave the European Union, then you will have to pay an Exit tax on unrealized gains.
B. Disposing crypto
1.Sale of crypto (i.e. exchanging crypto for fiat currency)?
Selling crypto for FIAT is taxed under category G Capital Gains. Negative Capital Gains/Losses can also be deducted. The loss can be used to offset for the upcoming 5 years. If an exchange goes bankrupt, you can also declare this as a loss. If in the end you get any funds from the exchange, it will be considered as 100% capital gains.
2.Exchange of crypto (i.e. exchanging one type of crypto for another, e.g. BTC for ETH)?e.g. in some jurisdictions a swap of crypto A to crypto B is treated as a sale of crypto A for the value of crypto B, and a purchase of crypto B for the value of crypto A.
Crypto-to-Crypto is not taxed UNLESS you are considered a full-time trader. Below are some elements to determine if your trade activity will be considered as your profession:
· The frequency of your trade (on a daily/weekly/monthly basis)
· The duration of financial products holding
· How many trading platforms you’re using
· Your profit level
· Your main activity to generate income from
The tax authorities will decide if you are considered a full-time trader.
3. Gifting crypto - Are there any specific rules for giving away crypto for free? What are the personal tax implications for the person making the gift? E.g. in some countries, it is treated same as sale of crypto, i.e. individual making a gift is deemed to receive a consideration in the amount of the market value of gifted crypto. Certain tax breaks apply for gifting to charities, close family etc.
1. Gifting crypto to eligible persons (e.g. spouse, children)
Gifting crypto to spouses and children is tax free in the same way as gifting FIAT is.
p.s. If any gift tax applies, it suffices to just state that gift taxes apply without going into details.
4. Paying for goods and services in crypto, e.g. exchanging crypto for goods and services (i.e. "buying" a Tesla with BTC)?
Buying goods with unrealized capital gains, is a form of cashing out. This means that you have pay your capital gains tax before you can buy other assets with you cryptocurrencies.
5.Transferring crypto between different wallets?
As long as the wallets are owned by the same owner, there are no taxes involved.
6.Losing crypto assets (e.g. losing private keys etc.) – can loss of crypto be accounted for tax purposes? What are the conditions or limitations?
The loss can be used to offset for the upcoming 5 years. If an exchange goes bankrupt, you can also declare this as a loss. If in the end you get any funds from the exchange, it will be considered as 100% capital gains. In case of losing your keys, when the keys are found, it will be considered 100% capital gains.
7. Lending crypto? What are the tax implications for the lender?
i. Giving out the principal amount?
Giving out and receiving the initial amount are not taxed. Only gains made on loans.
ii. Receiving back principal amount?
ii. Receiving interest?
a. in fiat
Receiving interest in FIAT and Crypto are taxed the same way. They will follow the tax scale until a maximum of 28%. With other words you can choose to tax them 28% flat or less if it’s your only income. You can only declare your total interest received at the IRS tax return
b. in crypto
See answer above
8. Any other relevant event?
In order to buy property your unrealized gains will be taxed, before you can use the funds to buy property. They will be taxed based on the value of the exact date.
C. Receiving crypto
1.Receiving as a gift (and selling afterwards)? e.g. in some jurisdictions a gift is treated as an acquisition for 0, so that full gain is realized upon subsequent sale.
It depends on how the gift is obtained. If it is obtained in the form of stock options, it will be considered as disguised wages that should be declared as an income as contractor. Gifts in the form of airdrops are taxed for 10% stamp duty.
2. Receiving airdrop without giving anything in return(and selling afterwards)?
Receiving airdrops are taxed under stamp taxes 10%.
3. Receiving airdrop for doing sth in return e.g. performing a service etc. (and selling afterwards)? e.g. in some jurisdictions receiving an airdrop is subject to income tax (other income) at the value of received tokens, and subsequent sale may be subject to capital gains tax (cost basis is the value of received tokens)
The airdrop tax percentage is 10%. If you have to do work to receive the airdrop you can register yourself an activity as a contractor. The lowest tax rate you would pay there is 15%, so just airdrops is more beneficial.
4. Receiving mining reward (and selling afterwards)? e.g. in some jurisdictions receiving a mining reward is subject to income tax (other income) at the value of received tokens, and subsequent sale may be subject to capital gains tax (cost basis is the value of received tokens)
95% of the income coming from mining Proof-of-Work are taxable by IRS. Miners have to open a freelance activity to declare their sold mined crypto assets. See:The final draft.
5.Receiving staking reward (and selling afterwards)?e.g. in some jurisdictions receiving a staking reward is subject to income tax (other income) at the value of received tokens, and subsequent sale may be subject to capital gains tax (cost basis is the value of received tokens)
Staking rewards are taxed at the moment they are converted into FIAT. The taxable rate is equal to Capital Gains, meaning they are taxed at maximum 28%. If being taxed by the normal tax brackets gives a better rate it will be taxed for that rate.
6.Mixer tumbler (e.g. you put 1 BTC in the mixer and get back 2 ETH). E.g. In some jurisdictions it is not a disposal if the same type of crypto is received, instead there is disposal only if you put crypto A in the mixer and receive crypto B.Crypto-to-Crypto is not a taxable event.
7.Salary(and selling afterwards)? High level answer would suffice. In some jurisdictions, salary cannot be paid out in crypto. Salary can not be paid out in crypto unless its paid to a contractor. If a contractor receives payment in the form of crypto he will have to declare the conversion into FIAT on the moment he receives it.If you receive crypto as a contractor you will have to open a freelance activity in Portugal. In this case you have to declare the conversion to EUR of the crypto payment you have received. For example: If you receive 109 USDC, you will have to declare you receive 100 EUR based on https://www.bportugal.pt/en/conversor-moeda
8. Inheritance(and selling afterwards)?High level answer would suffice.
Free acquisition of goods by individuals (inheritance and gifts) is taxed under the stamp tax at 10%
9.Fork(and selling afterwards):
a) Soft fork?
b)Hard fork?
For any profits obtained in crypto that are not mining profits, not airdrops and not capital gains, 15% will go to IRS and will be taxed in the tax brackets the rest of your income is taxed. This means that 85% is profit. The 15% is based on the fork rewards that you sell.
10. Any other relevant event (play2earn etc.)?
If P2E games are based on NFT´s they are out of current regulation as of 2023. If the P2E games are based on fungible tokens, the income will have to be declared in any of the other mentioned categories.
9. Special tax breaks (e.g. long-term gains exemption etc.)
Are there any specific tax breaks available for crypto taxation in your jurisdiction? E.g. in some countries, long-term crypto gains are tax exempt, i.e. a two-year holding period exemption applies, meaning that an individual is exempt from capital gains tax if (s)he sells crypto after holding it for at least two years. In the UK, a specific tax credit is allowed for capital gain purposes.
Holding over 365 days is tax free.
10. Use of losses
Please describe if and how losses may be utilized, carried forward/backward (e.g. carryforward for two years etc.)?
Only forwards. The loss can be used to offset for the upcoming 5 years.
11. Keeping records
Are there any specific requirements for individuals to keep specific records, or is it just a general obligation for individuals to keep appropriate records of transactions in case of tax inspections/requests?
You have to keep your records for 4 full years.
12. Reporting
a) Reporting Period (calendar year or other)?
The reporting period is from 01/01/2023 until 31/12/2023
b)Reporting deadline (e.g. by 31 March for previous calendar year)?
The reporting period is from 1 April to 30 June
c)Reporting form
i.What type of tax report needs to be filed? Is there an option to file electronic reports?
Reports can be submitted by individuals or registered accountants
13. Miscellaneous questions:
a) Rounding up – in calculating gains, taxes etc. how should numbers be rounded up, e.g. number 5.66667? Answer: 5.67
b)Tax software – is there an option/possibility for third party software providers to connect directly to an individual's personal tax account and communicate with the Tax authorities? e.g. UK tax office allows third party software integration.
c)Valuation: How do you calculate a market value of a specific crypto asset, e.g. by reference to a specific crypto exchange or some other method?
This is unfortunately still unclear. I expect that some tax software will be licensed. As Portugal does not tax crypto-to-crypto FIFO on the moment of selling is taxable. Regarding the pricing they trust the residents to use the fairest exchange data.
d)Which Forex rate is to be applied when dealing in foreign fiat currencies (dollars, euros etc.). E.g. it may be a middle exchange rate for a specific foreign fiat currency on the day the transaction is performed or the last day of the reporting period.
e)Income tax + capital gain tax on the same token - In some jurisdictions when you receive crypto from mining, staking or similar you pay income taxes on the value of received crypto and then you potentially pay capital gains tax on subsequent disposal of such received crypto. How is this situation regulated in your jurisdiction?
In Portugal you only pay taxes on Crypto-to-FIAT. This makes a situation where you receive staking rewards and reinvest a very hard process to track. Staking rewards and capital gains are taxed in the same way. This means that if you made capital gains on your staking rewards, both should be taxed for 28% maximum.
