Two bills that would have placed a tax on cryptocurrencies were rejected by the Portuguese parliament, Assembleia da Republica.
Portugal has long been considered a cryptocurrency tax haven, and cryptocurrency trade has been tax-free in the country since 2018. Furthermore, in Portugal, exchanging digital assets is not seen as an investment. Despite the fact that businesses that take Bitcoin must pay income taxes on it, this has drawn crypto entrepreneurs and events to Lisbon.
The Portuguese Minister of Finance, Fernando Medina, recently stated that cryptocurrencies will be subject to capital gains taxes in the near future. The Portuguese Assembleia da Republica, on the other hand, rejected two different bills from minor political parties to tax bitcoin assets.
Derek 'Isaac' Kaplan, the founder of DuoVerse and VMining, praised the news, saying that any "unacceptable taxation" would have hampered the cryptocurrency industry's growth. According to a media outlet, he stated:
"While a legal framework is required, the crypto industry must be allowed to develop; the cryptocurrencies are still in their infancy, therefore this shouldn't be taxed at the same rate as capital gains on comparable revenue; this development illustrates that crypto-friendly sentiment is strong in Portugal."
The suggestions came from the left-wing parties Bloco de Esquerda and Livre, which were both rejected at a 2022 budget voting session on Wednesday afternoon, according to a local newspaper. The government was urged to look into taxing crypto revenues exceeding €5,000 ($5,345.75).
Crypto transactions in Portugal are exempt from capital gains and other taxes. For financial investments, the current capital gains tax rate is 28 percent. During the same session of parliament, the country's deputy finance and tax minister, Antonio Mendes, stated that taxing cryptocurrencies is a "difficult scenario," and that capital gains may not be enough.
According to a media outlet, an emigrant to Portugal in February complimented the western Iberian country's crypto acceptance rate among retailers and even claimed that Bitcoin would one day become legal tender there. However, now that government authorities are debating how to tax digital assets, he may have a lot on his mind.