- Portuguese Tax Authorities (PTA) Shed Light On Taxation Policy On Cryptocurrency
- Cryptocurrencies Are Now Regarded As Currencies
Cryptocurrency users and similar businesses in the crypto industry have had different issues with the law ranging from legalization to taxation. The Portugal Tax Authorities (PTA) has announced that buying or selling of cryptocurrencies would not attract capital gain taxes or value-added tax (VAT). Although in 2016, there was a press release to this effect stating that any transaction with cryptocurrency would not be subject to tax, this does not cover the initial transaction.
Bitcoin (BTC) Price Today – BTC / USD
Value-added tax (VAT) also known as goods and services tax, is a payment made on the purchase of a product. A sales tax is a payment attached to the end of a transaction. As a response to a company looking into mining cryptocurrency, PTA cleared the air about tax payment on cryptocurrency transactions.
In the issued statement, the PTA quoted the decree relating to transactions with any currency. Article 135 (1) (e) of Council Directive 2006/112/EC stated that “transactions, including negotiation, concerning currency, banknotes, and coins used as legal tender, with the exception of collectors’ items, i.e. gold, silver or L 347/28 EN Official Journal of the European Union 11.12.2006 other metal coins or banknotes which are not normally used as legal tender or coins of numismatic interest” from Value-added tax.
With the latest statement, it means cryptocurrency will be regarded as other currencies. Meaning the same laws that apply to other currencies will be accorded to it. As with Portugal’s law, tax charges are not applied to profit on the transaction with any form of currency. Though not all European Union (EU) countries supports the latest movement by PTA.
In a recent interview with Luis Leon, a tax associate with Deloitte Portugal with News outlets, the partner stated that “Portugal does not tax the increase of the value of any currency nor the profit on the trade of any currency. Any currency deficits may not balance against any profits either.” He further explained that “Cryptocurrencies are no different from a Portuguese tax perspective. Accordingly, the appreciation of cryptocurrencies or any gains on the direct sale of cryptocurrencies is not taxed in Portugal.”
Currently, Portugal is setting the pace in Europe for other countries to emulate. With this new development, there is a bright future ahead for cryptocurrencies in Portugal. If you are considering acquiring any cryptocurrency, you can do that through credit card, and also peer-to-peer platforms.