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Portugal Issues First Formal Guidance on Cryptocurrency Taxation in 2022 Budget
The 2022 State Budget introduced Portugal's first comprehensive cryptocurrency taxation framework, taxing short-term capital gains while exempting long-term holdings over 365 days.
On 1 October 2022, the proposed State Budget for 2023 was published with Portugal’s first comprehensive legislative framework for cryptocurrency taxation. Prior to this, Portugal had been widely known as a crypto-friendly jurisdiction due to the absence of explicit taxation on individual crypto gains.
The 2022 proposal introduced taxation of short-term capital gains on cryptoassets held for less than 365 days, at standard personal income tax rates. Long-term gains (assets held for more than one year) remained exempt. The budget also proposed taxation of crypto mining and staking activities, as well as defining cryptoasset-related business income.
For foreign residents—especially digital nomads, tech investors and entrepreneurs from the US, UK, Brazil, Canada and Israel—the introduction of crypto taxation marked a major policy shift. While Portugal remained relatively favourable compared to most EU countries, crypto traders could no longer assume tax-free treatment.
The proposal sparked significant debate, but its publication signalled that Portugal was aligning with broader EU regulatory trends, including MiCA (Markets in Crypto-Assets Regulation).
Official source: Diário da República, State Budget Proposal for 2023, 1 October 2022 (https://dre.pt)