The Portuguese Tax and Customs Authority has confirmed that cryptocurrency users are not subject to the Value Added Tax (VAT) when trading digital assets or using them for payments, according to a report from Jornal de Negócios. In addition, the agency indicated that cryptocurrency use is also free from income tax obligations.
The clarification came in response to a company seeking to set up a cryptocurrency mining enterprise and cites a European Court of Justice ruling from 2015 that declared Bitcoin a means of payment that is exempt from the VSAT. The tax agency had previously ruled that income created by trading bitcoins could not be defined as capital gains under the country’s Securities Code and was thus exempt from capital gains tax.
While countries like the United States have adopted a less crypto-friendly tax approach to digital asset trading and payment transactions, several other nations have policies similar to Portugal’s. For example, individual cryptocurrency users and traders are free from a variety of taxes in places like Germany, Singapore, Malta, Malaysia, and Switzerland.