Unlike the United States or other countries which treat virtual currency as property, taxing it in a similar way to real stock or property, Portugal views cryptocurrency as a means of payment. In fact, the European country does not tax bitcoin or other crypto assets. “Capital gains generated from crypto transactions such as cashing out and crypto-to-crypto trading are not subject to personal income tax,” explains Shehan Chandrasekera, CPA and Head of Tax Strategy at CoinTracker, as reported by CNBC International. This means that similar to other fiat currencies, profits from buying or selling cryptocurrencies are not taxed.
Thus, crypto transactions or payments, as well as the exchange of bitcoins for fiat money, are not subject to value added tax, or VAT. “This makes Portugal a very attractive place for crypto users to live,” Chandrasekera continued. However, this rule does not exclude companies dealing with crypto assets. The business still faces some taxes in accordance with applicable regulations.
EU citizens have the right to permanent residence in Portugal, and for non-EU nationals, Portugal offers expatriates several pathways to stay, through the gold visa and the D7 Visa (also known as the retirement visa or passive income visa). Both these visa schemes tend to attract wealthy foreigners. Portuguese gold visas are granted to those who buy property, and/or invest a certain amount of money into the country. And unlike other crypto tax havens, namely Puerto Rico, Portugal does not require entrants to spend several days in the country before getting tax-free incentives for its crypto transactions.
CEO Katie Ananina said her company has helped hundreds of people from countries such as the US, UK, Australia and Canada get a second passport in any of seven countries, including Portugal. Plan B passports work in tandem with each government’s residence or citizenship investment program. “This is basically a donation into the country’s sustainable growth fund,” said Ananina. “So the client made a donation of US$100,000 or US$150,000, plus some due diligence fees, government fees, and then US$20,000 for my legal fees.”
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