Portugal’s Tax Authority has cleared that both cryptocurrency trading and payments in crypto will not be taxed within the nation.
According to a report published on August 26 by Portuguese business newspaper Jornal de Negócios, the Portuguese Tax and Customs Authority have affirmed that crypto transactions or payments are excluded from Value Added Tax (VAT).
The agency purportedly gave the clarification to a local crypto mining firm, distributing an official ruling document. In the paper, the office says that the trade of crypto for fiat cash is free of VAT, adding that crypto clients don’t need to pay any income tax.
In the official statement, the Portuguese tax authority mentioned a 2015 ruling by the European Court of Justice with respect to the case involving major Swedish Bitcoin (BTC) portal Bitcoin.se and its arbitrator David Hedqvist.
As detailed at the time, the court ordered that Bitcoin is a means of payment which the exchange should hence be exempted to VAT commitments. In any case, the Swedish Tax Agency subsequently contended against the ruling, claiming that the court did not completely get it at the time.
The affirmation follows an earlier tax ruling by the Portuguese tax authority that cryptocurrencies are not taxed within the nation. A document distributed by the organization in 2016 states that income from the sale of crypto in Portugal isn’t subject to income tax.
The central bank of Portugal, the Banco de Portugal issued a statement citing a 2012 crypto-related paper by the European Central Bank earlier in 2013.
The Portuguese bank raised concerns over the ECB’s Bitcoin acknowledgment as a “phenomenon of innovation in virtual currency models,” claiming that Bitcoin cannot be considered a secure currency because it is issued by unregulated entities.