Tax Guide for Cryptocurrencies in Portugal
Since 2023, Portugal has introduced a clear tax framework for cryptocurrencies. If you operate in the crypto world, it is essential to know what is taxable, what is exempt, and what your obligations are. This guide explains the main tax rules in a simple way, with practical examples.
What Is Meant by Crypto-Asset?
According to the Portuguese Tax Authority, a crypto-asset is any digital representation of value or rights that can be transferred or stored via blockchain or similar technologies. This includes most cryptocurrencies and tokens.
However, NFTs (non-fungible tokens), are excluded: they do not follow the same tax rules as other cryptocurrencies.
How Are Cryptocurrencies Taxed?
The Portuguese tax system distinguishes three main categories of income from cryptocurrencies, depending on the activity performed:
Business or Professional Income (Category B)
If you engaged in a crypto-related activity professionally or as a business, such as mining, validation, or minting:
95% of gross income from mining is taxable.
15% of gross income from activities such as trading, validation, or minting is taxable.
These amounts are taxed at a flat rate of 28% or, if you opt for aggregation, with progressive IRS rates, which vary according to total income.
Example: If mining bitcoin earns you €10,000, 95% (€9,500) will be taxed at 28% or included in your total income for progressive tax rates.
Investment Income (Category E)
Earnings from centralized platforms are taxable:
If you receive euros or other fiat currency, the income is taxed at the time of receipt.
If you receive crypto, you aren't taxed immediately. You pay tax only when you sell, and the entire sale value is considered capital gain (purchase cost set to zero).
Example: You receive 1 ETH as a reward and sell it for €2,000: the €2,000 fully counts as capital gain.
Capital Gains (Category G)
Crypto sales (including for goods or services) generate capital gains:
If you held the assets for less than 365 days, the capital gain is taxed at 28%, unless you choose aggregation (rates from 14.5% to 53%);
If you held the assets for 365 days or more, the capital gain is tax-exempt unless classified as a financial security.
Note: Crypto-to-crypto trades are not taxed immediately, but each transaction resets the 365-day holding period.
Example: If you exchange BTC for ETH, the holding period restarts at zero for the ETH received.
Capital losses are deductible only if the counterparty is not in a “blacklist” jurisdiction.
The FIFO (First In, First Out) method applies to determine purchase cost and sale value, separately for each exchange or wallet. For example, suppose you bought 1 BTC on January 1, 2024, and then purchased another 1 BTC on March 1, 2024. If you sell 1 BTC on April 5, 2024, the FIFO (First In, First Out) method means the BTC you sell will be considered the one bought on January 1, 2024. The sale cost and holding period are calculated based on that first purchase.
Important: The 365-day exemption and tax deferral do not apply for transactions with residents outside the EU/EEA or countries without a tax treaty (to avoid double taxation) with Portugal.
Capital Gains and the Aggregation Option
For capital gains from crypto held less than one year:
The fixed rate is 28%.
It is possible to choose aggregation (adding to overall income) with progressive rates: useful only if total income is low.
Example: With €5,000 capital gain and low income, you might pay less than 28%. With a high income, you might pay up to 53%.
Declaration Obligations
The annual tax return (Model 3 IRS) must be filed between April 1 and June 30. Taxes are paid by August 31. It is mandatory to report transaction types, income, dates, and other data in specific forms.
Annex B
For declaring staking and on-chain mining income.Annex E
For crypto income other than mining/staking, e.g., lending if rewards are received in fiat currency.Annex G
For capital gains from crypto held less than one year, through Portuguese platforms or non-custodial wallets. Also for sales to residents outside the EU/EEA or without tax treaties.Annex J
For staking/mining income generated abroad and for capital gains on foreign platforms from crypto held less than one year.Annex G1
To declare the sale of crypto held over one year via resident platforms or non-custodial wallets.
Currently, there is no section in Model 3 IRS to declare untaxed capital gains (e.g., crypto held over 365 days) realized abroad. Similarly, there is no annex to declare capital gains generated from transactions with residents outside EU/EEA or without tax treaties if made through foreign platforms. However, there is an obligation to report them.
Stamp Duty: When and How Much You Pay
In addition to income tax, in Portugal stamp duty (Imposto do Selo) may apply in certain particular cases related to cryptocurrencies. It is important to know when it applies, how much you pay, and what must be declared to avoid issues.
Stamp duty applies in two main cases.
Free receipt of crypto
donations,
inheritance,
free airdrops received without services rendered in exchange.
In these cases, if you are a tax resident in Portugal or if the crypto is held in wallets or platforms located in Portuguese territory, you must pay a 10% rate on the received value. Exemptions include:
donations between spouses, registered partners, ascendants, and descendants (parents, children, grandparents, grandchildren),
donations under €500 in total.
Fees paid to crypto service providers (VASP)
If you pay fees for crypto transactions to a VASP resident in Portugal, or if you are a Portuguese tax resident using foreign services, a 4% tax on fees paid applies.
When and How to Declare
For both cases above (donations/inheritance or fee payments), the law requires submitting a monthly stamp duty declaration. This must be filed by the 20th day of the month following the transaction, along with payment of the due tax.
Example: If you receive crypto by donation on March 5 or pay a fee to a VASP on March 10, you have until April 20 to declare and pay the tax.