Portugal

Portugal classifies cryptocurrencies as virtual digital assets, operating under a regulated legal status established by the 2023 State Budget Law. This framework fully integrates crypto assets into the national tax system, with ongoing efforts to incorporate the EU's Markets in Crypto-Assets (MiCA) regulation. The Autoridade Tribut√°ria e Aduaneira (AT) is the governing body for crypto taxation in Portugal. Taxation is handled under the Personal Income Tax (PIT) and Corporate Income Tax (IRC) frameworks, as defined by the 2023 State Budget Law. Annual reporting of crypto assets, income, and losses has been mandatory since February 2024. For individuals, capital gains from selling crypto for fiat currency are subject to a 28% flat tax if the assets were held for less than 365 days. However, these capital gains are entirely exempt from tax if the crypto assets were held for more than 365 days. Value Added Tax (VAT) does not apply to the exchange of crypto for fiat currency, but services like custodial solutions and Software-as-a-Service (SaaS) related to crypto are subject to a 23% VAT rate. Corporations operating on the mainland are subject to a standard 21% corporate tax rate, plus potential municipal surcharges, with reduced rates available in Madeira. Income from staking, lending, and other Decentralized Finance (DeFi) activities is generally taxed at a flat rate of 28% upon receipt of the rewards. If these activities, or crypto mining, are classified as professional or business activities, the income is subject to progressive Personal Income Tax rates ranging from 14.5% to 53%, with deductible expenses applicable for mining. Non-fungible tokens (NFTs) are treated under general capital gains rules based on their holding period, and their trading is exempt from VAT. Importantly, exchanging one cryptocurrency for another (crypto-to-crypto swaps) is not a taxable event, the cost basis of the original asset carries forward to the newly acquired asset, deferring any tax implications until conversion to fiat currency. Portugal is currently in the process of transposing the EU's Markets in Crypto-Assets (MiCA) regulation. A transposition bill is anticipated by December 2025, with the new rules expected to become effective in July 2026. This implementation primarily aims to enhance the supervision of Crypto-Asset Service Providers (CASPs) by the Banco de Portugal and the CMVM, without currently introducing significant changes to the existing tax framework.