Capital gains formula in Portugal
A capital gain or loss in Portugal is calculated as follows:
Sale value of the crypto – Acquisition cost (or cost basis) = Capital Gain/Loss
The cost basis includes both the amount paid to purchase the asset and any fees incurred during the buying and selling process.
What price to use if you bought crypto at different times and prices?
Portugal applies the FIFO (First In, First Out) method per asset and per platform. That means when you sell or convert crypto, the crypto you acquired first (chronologically) is treated as the one sold first.
Example
Date | Type | Quantity and Asset | Transaction Value | Unit Price |
01 Jan | BUY | 1,00 ETH | € 2.000,00 | € 2.000,00 |
05 Feb | BUY | 2,00 BTC | € 6.000,00 | € 3.000,00 |
22 Mar | SELL | -1,00 BTC | € 2.500,00 | € 2.500,00 |
Applying the FIFO rule to this transaction history, the calculation will be:
sale value of the crypto: € 2.500,00
buying cost of the first crypto bought: € 2.000,00
gain/loss: € 2.500,00 - € 2.000,00 = € 500,00
Separate tracking for each wallet and exchange
The FIFO (First In, First Out) method is applied separately to each individual wallet or exchange. This means that, for tax purposes, you must track the order of your crypto purchases and sales independently for every wallet or exchange you use.
Example
You bought 1 BTC on Exchange A and later 1 BTC on Exchange B, when you sell from Exchange A, only the purchase history on Exchange A is considered for FIFO calculations. The coins on Exchange B are not mixed with those on Exchange A. Each platform or wallet has its own separate FIFO “queue.”
The 365‑day holding rule
In Portugal, if you hold a cryptocurrency for at least 365 days before selling, converting to euros, or using it for purchases, any capital gain realized is exempt from taxation.
Example
Date | Type | Quantity and Asset | Transaction Value | Unit Price |
09 May 2024 | BUY | 1,00 ETH | € 2.000,00 | € 2.000,00 |
12 July 2024 | BUY | 2,00 ETH | € 6.000,00 | € 3.000,00 |
15 June 2025 | SELL | 3,00 ETH | € 12.000,00 | € 4.000,00 |
Applying the 365-day rule, to this trasnaction history we should still calculating capital gain on the ETH bought on 12 July 2024 since the 1,00 ETH bought in May has been held for more then 1 year.
Capital gain on ETH bought on 09 May 2024:
sale value (sale unit price x nr of units bought on 09 May 2024)
€ 4000,00 x 1 = € 4.000,00
buying cost (buy unit price x nr of units bought on 09 May 2024)
€ 2000,00 x 1 = € 2.000,00
gain/loss (sale value - buying cost)
€ 4.000,00 - € 2.000,00 = € 2000,00 NOT TAXABLE
Capital gain on ETH bought on 12 July 2024:
sale value (sale unit price x nr of units bought on 12 July 2024)
€ 4000,00 x 2 = € 8.000,00
buying cost (buy unit price x nr of units bought on 12 July 2024)
€ 3000,00 x 2 = € 6.000,00
gain/loss (sale value - buying cost)
€ 8.000,00 - € 6.000,00 = € 2.000,00 TAXABLE GAIN
Exception to the 365-day rule
The 365-day capital gain exemption does not apply if the counterparty or platform involved in the transaction is located within the European Union, the European Economic Area (EEA), or a country with which Portugal has a double tax treaty (DTT).
So if you exchange crypto with a resident in a tax haven, or you are trading crypto or paying for a service to a resident in a tax haven, even if you have held those crypto for more than 365 days, the exemption does not apply.