Crypto Regulations in Portugal
On April 21, 2020, the Portuguese government passed the “Digital Transitional Action Plan.” The act establishes “Free Zones” for the testing of crypto technology. These zones create a flexible regulatory environment for testing purposes, including on-site testing in real-life settings, and provides assistance from regulatory entities. Hence, the program will reduce the regulatory and legal burden that crypto businesses face as they develop and experiment with new technologies. There are three main focuses for the program: “Capacity-building and digital inclusion of people, digital transformation of businesses, and digitalization of the State.” The rests resulting from the free zones will supply a reliable assessment of the technical and commercial viability of blockchain technology. The key areas of focus for the free zone tests are “regulation, digital privacy, cyber-security and defense, the data economy, communications, and infrastructure.”
Source: Freeman Law
At present, there are no specific laws or regulations that govern the issuance of cryptocurrencies (except the rules established in the Portuguese AML Law).
Source: Global Legal Insights
Is crypto legal in Portugal? Yes. Although it is not recognized as fiat currency, like the euro, you can legally trade crypto in Portugal. You can also cash out crypto into euros. It does not, however, have legal tender status, such as the euro, meaning it is not recognized by the government as a means to settle public debt and pay legal fines, for example.
Source: Portugal
In Portugal, cryptocurrencies do not have a legal tender and thus do not qualify as fiat currency, nor are they treated as “money” (whether physical or scriptural) or, in principle, “electronic money”. In this respect, the European Banking Authority (EBA) in its report of 9 January 20194 has identified limited cases where cryptocurrencies can be considered “electronic money” as defined in Directive 2009/110/EC (EMD2), provided they match the criteria set in EMD2.
Source: Global Legal Insights
Virtual assets are not legal tender in Portugal, meaning that it is not compulsory to accept them at face value; There is no legal protection of any kind guaranteeing the rights of redemption for a consumer using virtual assets to make payments, unlike regulated payment instruments; In the event of virtual assets depreciating in whole or in part, there is no fund to cover any losses borne by their users, who will have to take on all the risks associated with transactions using these instruments; Virtual asset users may lose their money on the trading platform; Transactions with virtual assets may be used unlawfully, in criminal activity, including for ML/TF.
Source: Banco De Portugal
In Portugal, cryptocurrency transactions are exempt from VAT, as the country views cryptocurrencies as a form of payment rather than an asset. The Portuguese currency is the Euro, but you can be paid in cryptocurrency and pay for items with crypto visa cards – it’s a win-win situation for crypto traders and investors.
Gains made from the acquisition and sale of cryptocurrencies, like any other currency, are not taxed. Companies that provide services related to cryptocurrency, on the other hand, are taxed on capital gains on a scale between 28 and 35 percent. It’s possible that your bitcoin trading is tax-free if it’s not done on a regular basis. However please note that if you trade bitcoin as your primary source of income, you must file a tax return and pay taxes on your earnings.
Source: Get Golden Visa
In 2019, the Portuguese Tax & Customs Authority (PTA) declared that buying or selling cryptocurrency is tax-free in Portugal. Specifically, the PTA stated that crypto transactions are not subject to capital gain taxes or value-added tax (VAT). Crypto transactions are exempt from these taxes even though they are analogous to a “means of payment.” However, there are a few exceptions. Crypto exchanges for goods or services does not change the tax treatment of the original transaction. Secondly, taxpayers who trade in crypto as professionals or business activity are still subject to the same taxes.
Source: Freeman Law
Portuguese banks ban digital currency exchanges—regulatory compliance is crucial EDITORIAL 11 AUGUST 2022 Gavin Lucas Late last week (August 4) news broke that several prominent Portuguese banks had shut the accounts of multiple digital currency exchanges. The Portuguese banks, including Santander, BCP, and several others, cited risk management as the reason for the termination of the accounts, although no specific information was given. The closures occurred even though the Bank of Portugal had licensed the firms concerned, which included Luso Digital Assets, Mind the Coin, Criptoloja, and others.
Source: Coin Geek
Since September 2020, Banco de Portugal has been the competent authority in registering and verifying compliance with the applicable legal and regulatory provisions governing the prevention of money laundering and terrorist financing (AML/TF) in Portugal. This is relevant for; entities that carry out activities involving virtual assets, namely exchange services between virtual assets and fiat money, Virtual Asset Providers Service Providers (VASPs), and virtual asset transfer services, amongst others.
Source: Mondaq
The Portuguese government has proposed a new cryptocurrency tax policy that would take effect as part of its 2023 national budget, according to a government-issued report published Monday. Within the nearly 450-page macroeconomic strategy and fiscal policy report, a small section states that the Portuguese government will impose a 28% capital gains tax on cryptocurrency gains made within one year. However, gains realized after one year of holding the crypto assets will be exempt from such a tax.
Source: Decrypt
Banks in Portugal are closing the accounts of crypto exchanges in what seems to be a u-turn in the country’s pro-crypto policies, Bloomberg News reported on August 3. One of the biggest exchanges in the country, CriptoLoja, saw its accounts with two banks, Banco Santander and Banco Comercial Portugues, closed last week. Before that, other smaller banks in the country had closed the exchange’s accounts without explaining the decision. Bloomberg reported that Banco Commercial said it has the duty of notifying authorities about any “suspicious transactions,” which may lead to the closure and termination of some relationships.
Source: Cryptoslate
A Polish couple has been arrested in Portugal for selling drugs for bitcoins, according to Portuguese website Pplware. This is the first-ever bitcoin apprehension in the country, even though cryptocurrencies are relatively popular in Portugal l – so much so, there’s a crypto version of our pre-euro national currency, dubbed cryptoescudo. The couple was arrested for running a synthetic drug lab in the municipality of Lourinhã, where they produced pills they would then sell throughout the world. The couple, aged 40 and 34, had been under investigation since the end of 2016 but was only now arrested by the Judicial Police (Policia Judiciária), a criminal investigation agency in the country.
Source: CCN
Portugal has no sandbox options for FinTechs. However, in September 2018, the Portuguese regulatory and supervisory authorities of the financial sector and the Portugal Fintech association launched Portugal FinLab, an innovation hub, the purpose of which is to support the development of innovative solutions in FinTech and related areas through cooperation and mutual understanding. In January 2020, Portugal Fintech set up the Fintech House. This space is focused on the development of FinTech ecosystems and the promotion of financial and technological innovation, and brings together more than 30 start-ups and institutional partners, including banks, insurance companies, consulting firms and investors.
Source: ICLG
