Are Cryptocurrencies (like Bitcoin) Tax Free in Portugal?

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If you’ve made money on Bitcoin, or you think you could make money trading or speculating on cryptocurrencies, you may be wondering where the best place is to live tax-wise. And, you may have heard that Portugal is a very good option. 

The Portuguese tax authorities do not charge capital gains or VAT on personal gains made on currencies, including cryptocurrencies. That means if you buy $1 worth of Bitcoin and you sell when that Bitcoin is worth $1.50, you won’t get taxed on the gain ($0.50). This is according to a 2016 paper from Finanças[1]https://info.portaldasfinancas.gov.pt/pt/informacao_fiscal/informacoes_vinculativas/rendimento/cirs/Documents/PIV_09541.pdf which was reported on in Portuguese newspaper Jornal de Negócios[2]https://www.jornaldenegocios.pt/economia/impostos/detalhe/troca-e-remuneracao-de-criptomoeda-isentas-de-iva?ref=Economia_outros.

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The same applies if you buy USD or GBP and the value of the dollar or pound goes up. You won’t be taxed on the capital gain as it’s a currency. Stocks and other investments are treated differently. 

This may change, and it may be a case that the law simply hasn’t caught up. Despite what many articles tell you, particularly on the subject of NHR (Portugal’s non-habitual resident regime), Portugal is not a tax haven and normally has some of the highest taxes in Europe. Normally is the keyword here, as programs like NHR do allow you to avoid Portugal’s standard tax regimes for a period of time. For the time being, however, nothing has changed since 2016 and crypto gains aren’t taxed. 

Now, the examples above apply to individuals rather than professional traders. If your main business is derived from trading or mining crypto, the tax office will look at your situation differently. 

One common mistake people make is assuming that if they get paid in Bitcoin and then they won’t be taxed. This isn’t true, unfortunately. If you earn an income and you’re tax resident in Portugal, the Portuguese government will want to tax it. It doesn’t matter whether you’re paid in cryptocurrencies or FIAT currencies like Euros, USDs, or anything else. You’ll have to submit a tax return and pay them (in Euros). 

How can I move to Portugal?

Besides taxes on cryptocurrencies, another reason to move to Portugal is its range of attainable visas which offer the chance to obtain Portuguese citizenship in just 5 years. 

The D7

The most interesting is the D7 visa, which is aimed at those that have some form of regular and ideally passive income such as a pension or income from rentals. Salaries from a remote job are also becoming more and more common acceptable forms of income for the D7. 

What’s most appealing about the D7 is that the income requirements only need to match Portugal’s minimum wage, which is around €635 per month. For many people, particularly those with crypto investments, this is very achievable. 

Read more about the D7 

The Golden Visa

The Golden Visa is designed for those that want to become resident in Portugal but don’t actually want to spend time here: the visa stipulates that you only need to spend an average of 7 days per year here. 

This setup is ideal for those that want to travel full-time or are still working full-time in another country but still want a path to citizenship or permanent residency. Normally you would have to spend 6+ months per year in Portugal. 

There are multiple ways you can be eligible for the Golden Visa, but the most common is to purchase a property worth €500k or more (in some cases it can be as low as €350k or even €280k). 

There are additional fees to consider, which are much higher than the D7, and this needs to be considered when weighing up the different visas. 

Read more about the Golden Visa

The D2

The D2, or entrepreneurship visa, is designed for those that want to start a business in Portugal. Like the other visas, it’s possible to apply for citizenship after just 5 years. 

Many countries have an entrepreneurship visa but what makes the Portuguese d2 so appealing is that 

  • There’s no minimum investment (although around €5k is recommended, which is still low). 
  • The business can be in any industry. 

Read more about the D2

But what about other taxes?

Portugal has some of the highest rates of personal income tax in Europe, which may not make it very appealing. However, the Portuguese government knows this and, in a bid to attract more people to Portugal, they introduced the NHR (non habitual resident) program.

The program can be a little complex but, in general, it allows for income abroad to be taxed at source (e.g. if you run a business in the UK, you can pay your taxes there) over a 10-year period. Certain types of income (such as dividends or royalties) may not be subject to tax as well. 

Although it’s often advertised as a way of paying 0% tax in Portugal, very few people manage to do that. Portugal is not a tax haven, nor does it want to be. 

However, the fact that you can pay taxes somewhere else rather than be subject to Portugal’s tax tiers, or, as is the case with many, pay a fixed rate of around 20%, does soften the blow of Portuguese taxes somewhat.  

Written by

Hi, I'm James. I'm the main writer at Portugalist and the author of the book Moving to Portugal Made Simple. I started Portugalist because I felt there was a real lack of good quality information about Portugal and I wanted to change that.

This article was originally published in January 2021.

19 thoughts on “Are Cryptocurrencies (like Bitcoin) Tax Free in Portugal?”

  1. Hello,

    I think there is so much disinformation about 0% tax in Portugal where majority of people will have to pay tax, and it's not small.

    Moving to Portugal with a crypto fortune in order to cash out also may not work out as expected if it appears that this is a relatively major source of income, which it will be in most cases for those planning to cash out in Portugal.

    So if you want to come to Portugal to cash out your crypto tax free it aint gonna happen. They will consider you as a professional trader if it is your only income or if it is substantial income. Am I right?

    So, basically, Portugal is a tax heaven for those with decent income other than from crypto, when they invest a smaller part of that income into crypto and largely HODL (don't take profits regularly). But for more active traders and those with relatively (to other sources of income) major crypto holdings, it may not be so.

    Meaning almost all people that think they will get 0% tax, they won't get it. As Portugal authorities will tell you that you are a professional trader as soon as they will see big chunk of money, the rules are vague for a reason, so they can apply it to those with big $$$.

    Please advise if otherwise. For example:

    So, if I move and have 100k in bitcoin and sell it while in Portugal, and I will not be employed and my only income will be from crypto staking, and I wanted to cash out a lump of sum when I become resident, will I be taxed??

    I am not a trader and do not do swaps, just hodl and sell my bitcoin maybe once a month or every 3 months.

    Whats your thoughts on this example? Can you redirect me to some crypto tax experts from Portugal?

    Reply
    • Hi Blonde,

      I'm hoping to find some crypto experts (both traders and accountants who specialise in this) for future articles and webinars for the site as this isn't something I can personally give advice on.

      Reply
      • Yes please inform if possible. Tax on crypto could be an increasingly hot topic for the coming months.
        May be helpful to see also someone's personal experience dealing with the Portuguese Tax authority after depositing from a crypto exchange.
        I have a recent tax number but I didnt move my fiscal residency yet, the Town Hall I am moving to explained they can register me quickly without appointment, unlike the previous one. Not in Portugal at the moment anyway.

        I think Blonde is addressing the most popular concerns including :

        " So if you want to come to Portugal to cash out your crypto tax free it aint gonna happen. They will consider you as a professional trader if it is your only income or if it is substantial income. Am I right?"

        Reading on the internet (few, non official sources though)

        It looks to me that the classification of "professional trader" (for which Crypto tax is not free) may be on a case to case basis.
        Also, seems entirely at discretion of the tax officer due to the undefined / broad definition of "professional" classification of a professional trader for the crypto industry.

        In this view, if your bigger source of income / bank withdrawal in PT is Crypto ( nearly 100% ! )
        the tax office has all the power to send you a large tax bill.

        Similarly, if you do it regularly they also have the power to decide you are "professional" therefore to be taxed.

        I currently don't know:

        If this is the approach, if the bank will report any income to the tax office or over a certain amount or the interests only.

        If the Tax office will request to look any trading records from you of the platform you use, then decide with the above criteria.

        Best way forward could be:

        Check the recent official font of information
        Check personal experiences
        Inquire with the Tax office directly

        I will try to get some info.

        Reply
  2. I would like to ask a similar question. 2 linked questions if that's OK.

    If I rent a property in Portugal on Jan 1st 2022, having officially severed ties with the country I am currently resident in - EU Country A - and I apply for Portuguese residency via NHR... provided it is granted, can I sell my crypto tax-free as soon as I am officially a Portuguese resident?

    And how long would I need to be an official Portuguese resident before I would be able to change my residency to EU Country B? I'm guessing at least a year, but would one year be enough? Particularly if the country I left Portugal for is different from the one I then move on to?

    Thanks

    Reply
    • Hi Andy,

      A good question for an accountant/financial advisor, which I'm not. Happy to put you in touch with one, if you like?

      There are a few points you should consider:

      * You may be asked to spend 90 days in Portugal as a non-resident before receiving your CRUE. Not an actual requirement, but some councils make you do it
      * The NHR regime doesn't really have anything to do with crypto/gains from currency
      * If you leave Portugal and go to a new country, you won't be able to benefit from the NHR regime any more
      * It is possible to move to Portugal for a year, particularly as an EU passport holder, but it can sometimes take that long to get all of your paperwork (e.g. healthcare, social security, etc) sorted.

      Reply
      • Thanks for your reply. Yes I would like to talk to a financial advisor if they know about crypto gains specifically and how it would apply to Portuguese residency. Can you recommend one please.

        Although can you also explain why you say NHR is nothing to do with crypto. Do you mean that you can or can't convert currency/crypto tax-free if you have NHR status?

        And healthcare/social security etc delays that you mention - will they mean that you are not a Portuguese tax resident until they are all sorted out, or will you be officially a resident tax-wise, but from a day-to-day perspective you are left to sort out the other paperwork, eg you can't register with a doctor for the time being etc?

        Thanks

        Reply
        • Hi Andy,

          Let me have a check and see if there's someone who can help.

          I don't think NHR mentions crypto or even gains from currency, so it wouldn't matter whether you had it or not. However, there are other benefits for having NHR status, so I would still apply.

          Yep, you'll become a resident and then tax resident, but there are still a lot of bureaucratic hurdles like registering for healthcare. You'll still be able to use A&E in an emergency or the private system, but some people seem to struggle to get registered with a local doctor. These are additional things and nothing to do with residency/tax residency.

          Reply
          • Thanks again. If you find an advisor please let me know - post here or email me (I presume you have my email as I had to fill it in to post on this site)

            Can I check one other thing about NHR - it says the process requires you to go to your local town hall and bring: passport, EHIC card and "a current address, but will not require proof of residency".

            That "current address" - does it have to be in Portugal? If I'm intending to come to Portugal and rent for a year I thought it might be difficult to secure a rental contract without having some kind of proof of residency first, a Catch 22 I found with some other EU countries. Therefore I might still be officially resident in a different EU country until I find my own home in PT.

            Can one apply for NHR in advance of securing your own home address in Portugal (for example if one was staying with friends while looking for your own place), or is your own Portuguese residence address vital to begin the application?

            Thanks

            Reply
  3. Hi, I am a Portuguese and American dual citizen. Would I need to open up a Portuguese bank account to transfer my crypto earnings to and take advantage of the untaxed benefits that Portugal presents? Thanks.

    Reply
  4. Hello

    I like johns question. you have answered it mostly but still unclear to me. So i want to sell my cryptos and pay 0% or a few percent in portugal. I am willing to buy a property for whatever amount is needed. I would want to be there a month or less for the year. Would i qualify for this tax exemption and how long do i have to be in portugal within the year. Also, i have a possibility to bring my online business to portgugal because canada is crazy for taxes, so 20% for personal taxes sounds really good. Would love your input as i see you are very intelligent on the topic.

    blessings

    sebastian

    Reply
    • As far as I know, you're normally tax resident in the place where you spend the majority of the year. That's not the only criteria, but it is a big factor.

      The golden visa does allow you to be resident here while only spending an average of 7 days per year, but you would also not need to spend enough time in another place (e.g. Canada) that you would be tax resident there.

      Sounds like a good question for an accountant/tax advisor.

      Reply
  5. I'm unclear about something. Perhaps someone can help. I am an EU citizen (Ireland).

    I understand that to qualify for 0% tax on any crypto profits one must reside in Portugal for 180 days in a 12 month period.

    Does this mean I must have resided in Portugal for 180 days BEFORE selling my cryptos in order to avoid taxation on my cryptos profits?

    Or does it mean if I move to Portugal next week and sell my cryptos next month that in order to avoid tax on crypto profits I would then need to continue to reside in Portugal after I have sold my crypto until I have accrued a total of 180 days in order to qualify for 0% tax?

    Looking forward to a response.

    Reply
    • Hi John.

      There are two definitions of tax residency here in Portugal:

      i. is that you have exceeded 182 days here, but you can also be considered tax resident here by spending less time under the second definition, as follows
      ii. if you have a permanent home here in Portugal and you intend to keep it and occupy it as your permanent home - this applies EVEN if you have spent less than 182 days here

      However, the trickier part is making sure that you have clearly detached yourself from the tax system you are currently in and satisfying their rules.

      I hope this helps.

      Mark Quinn (I'm a Tax and Financial Adviser at Blevins Franks in Portugal).

      Reply

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