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The amendments included in the 2023 State Budget Law aim to fill the legal gap in the taxation of cryptoassets in Portugal, promoting a new tax framework, especially regarding personal income tax (PIT).


The legal concept of a cryptoasset has been introduced in the Personal Income Tax Code (“PIT Code”), under which a cryptoasset is defined as “any digital representation of value or rights that can be transferred or electronically stored using distributed recording or similar technology”.

Moreover, in an attempt to clarify said concept, a negative delimitation has also been introduced by excluding “unique and non-fungible cryptoassets.” Hence, the intention seems to be to exclude assets deemed to be NFTs (“Non-fungible tokens”) from the concept of a cryptoasset.

The concept is vague and diverges from the conceptualization previously introduced by the Portuguese Securities Market Commission (“CMVM”), which defined cryptoassets as “digital representations of assets based on blockchain technology, which are not issued by a central bank, credit institution or e-money institution and which can be used as a form of payment in an accepting community or have other purposes such as granting the right to use certain goods and services or to a financial return”.

Within the scope of PIT, taxation is introduced in three different income categories: Category B (business and professional income), Category G (movable and immovable property capital gains) and Category E (investment income).


Income from “cryptoasset issuance operations, including mining, or the validation of cryptoasset transactions through consensus mechanisms” is intended to be qualified as professional and business income.

The general and progressive PIT rates shall apply to income from such business activities, as a result of the general rules already applicable to the income included in Category B, with a 0.15 coefficient being applied (except to income from mining) insofar as the simplified taxation regime applies.

The intention is to “professionalize” the activity related to the issuance of crypto, as it is presumed that only 0.15 of the gross income obtained is effectively taxable income, since the application of this coefficient does not depend on any proof of expenses incurred with the activity.

Such a presumption will therefore lead to the non-taxation within Category B of 85% of the income obtained from this type of transaction.

The 0.95 coefficient shall apply to income from mining, however.
We also believe that said 0.95 coefficient could apply in the case of investment income or capital gains resulting from treasury operations and/or financial investments in cryptoassets.

As regards the relevant taxable event, the date of the onerous alienation of the asset is expected to be relevant.

In this respect, it is also important to note that the loss of Portuguese residency status and the termination of a commercial activity are treated similarly as an onerous alienation of cryptoassets.

Consequently, this means that the PIT Code now envisages an exit tax mechanism, under which taxpayers will be taxed if they decide to change their tax residency to other jurisdictions, as explained.


The 2023 State Budget Law also introduces a new sub-paragraph in the PIT Code, under which the concept of capital gains is developped, the income deriving from the sale of cryptoassets which do not constitute securities being considered as such. A special rate of 28% shall be applied to this type of income.

It is important to note, however, that a tax exemption is envisaged for income from the disposal of cryptoassets held for a period of 365 days or more, unless either the beneficiaries or the entity paying the income are resident outside the European Union or the European Economic Area, or in a country or jurisdiction without information exchange instruments.

Hence, and as predicted for the regime on capital gains derived from transactions with shares, bonds and other securities, which aimed to increase the taxation of speculative capital gains held for a period of up to one year, the same regime is now being applied to the taxation of capital gains from transactions with cryptoassets.

Nevertheless, in the speculative capital gains regime, the 28% rate is applicable on gains realized on the disposal of securities held for a period of more than one year and the marginal rates (up to 48%) are applicable on gains deriving from securities held for a period of less than one year, provided that the taxpayer’s taxable income is equal to or higher than the last bracket foreseen for the marginal and progressive rates.

With regard to this topic, it is important to highlight the transitional provision that has been introduced, under which the considered holding period of cryptoassets, for purposes of the above PIT exemption on capital gains, starts from the original acquisition date, even if this was before this legislation entered into force.

In effect, the legislator intends the full holding period of cryptoassets to be considered as of 2023, even if the period started before then. Again, it should be noted that when the cryptoasset is held for a period exceeding one year, the legislator will apply the exemption of the capital gain derived from this income.

In line with the above, it is also envisaged that the negative balance assessed in a given tax year, related to transactions deriving from the sale of cryptoassets, may be carried forward to the following five tax years, insofar as the taxpayer opts to aggregate the taxable income.

As regards the calculation of the capital gain from the disposal of cryptoassets, the capital gain shall be computed “by the difference between the sales value and the acquisition value, net of the part qualified as investment income”, the market value at the time of the sale being set as the sales value.

Finally, the possibility of deducting the expenses inherent to the acquisition and disposal of cryptoassets is also considered for capital gains calculation purposes.

In terms of anti-abuse rules, it is relevant to note that residents in tax havens will not be able to deduct any losses on cryptoassets. Moreover, the introduced legislation promotes the use of the “first in first out” (FIFO) rule to determine income, in keeping with the other real securities.


With regard to income falling within Category E (investment income), it is also important to highlight the rule included in the regime envisaged for capital income (Category E).

Any type of remuneration deriving from cryptoasset transactions (e.g. delegated or off-chain staking) is envisaged as qualifying as investment income (Category E). In this last scenario, the taxation levied on this income shall be 28%, insofar as the taxpayer, a tax resident in Portugal, does not opt for the aggregation of this income.

Therefore, we underline that, should the taxpayer opt for aggregation of income, the general and progressive rates of the PIT Code will apply, and the taxation of these amounts may reach 48% (to which a surtax of 2.5% or 5% may also be added).
Additionally, with regard to investment income from cryptoassets, the exemption of withholding tax is established, depending on the specific features and nature of the product.

The abovementioned amendments thus confirm the previously admissible interpretation, namely the inclusion of this type of income as investment income, given the scope of the applicable rule and the respective concept of investment income, adopted for PIT purposes.


Additionally, a new reporting obligation has been introduced, for monitoring purposes, which will apply to natural and legal persons, bodies and other entities without legal personality providing cryptoasset custody and administration services on behalf of third parties or managing one or more cryptoasset trading platforms.

These entities will now have the obligation to notify the Tax Authorities of any transactions with cryptoassets carried out with their involvement for each taxable person by the end of January of each year, by submitting an official form to be approved for this purpose.

It should also be noted that on October 10, 2022, the OECD published the “Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard”, in the expectation that, in the near future and within the scope of the adoption and enforcement of this document by the various OECD member countries, the exchange of information on cryptoasset transactions for tax purposes, will be mandatory.


The 2023 State Budget Law reflects the intention of the Portuguese Government to move forward with a framework for the taxation of income arising from crypto active assets, more specifically by expressly including this type of income within the PIT rules, namely under Categories B (business and professional income), G (movable and immovable property capital gains) and E (investment income).

It is also important to note that all natural or legal persons, bodies and other entities that provide crypto active assets custody and administration services on behalf of third parties, or that manage one or more crypto active trading platforms, will now be required to notify the Tax Authorities by the end of January of each tax year of any transactions carried out with their intervention.

Lisbon, January 6, 2023 – Rogério M. Fernandes Ferreira, Rosa Freitas Soares, Joana Marques Alves

Tags: Portugal

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