The state of the cryptocurrency market is not ideal right now. Since the beginning of the year, it has been in a protracted bear market and declining. The current crypto bear market has seen some of the biggest losses in the industry. Adding to the dismal is the crypto tax being imposed in countries globally.
In its 2023 budget, Portugal will impose a 28% cryptocurrency tax, according to a Bloomberg article. The tax, which would be implemented for the first time in Portugal, is being pushed for inclusion in the budget for the following year.
The idea, according to authorities, aims to create standards so that Portugal may boast a system that encourages expansion of the local crypto industry. Portugal’s government wants to capitalize on the growing adoption of cryptocurrency across much of Europe.
The proposed legislation would impose a 28% crypto tax on all digital assets in Portugal, although not all of them would be subject to the new legislation. According to the announcement made on Monday, only virtual currencies purchased and held for less than 12 months would be liable to taxation.
The plan from lawmakers also maintains the tax exemption for digital assets held for more than a year. A 10% tax on free crypto transactions, which might include airdrops, was also proposed by policymakers. According to reports, the proposal also includes a 4% tax on the commissions paid by crypto brokers.
However, the budget must first receive approval from the Portuguese parliament before becoming a law.
Portugal’s history with cryptocurrency
Deputies from the Portuguese government spoke during a discussion of the State Budget for 2022. There were a number of up-front proposals. It was intended for the discussion to go on all week.
Different suggestions from various parties were turned down. One of many recommendations was the taxation of cryptocurrency. A news site called ECO Sapo reported in May 2022 that the taxing proposal for cryptocurrencies was rejected.
One of the most crypto-friendly nations in Europe, Portugal, recently announced that it would start taxing cryptocurrencies. The days of tax-free benefits for cryptocurrency investors in Portugal, according to many, are over.
