The Essential Guide to Crypto Tax in Portugal for 2025

Portugal's approach to cryptocurrency taxation has evolved substantially in recent years. Once considered a crypto tax haven, the country introduced stricter regulations in 2023, applying taxes to various forms of crypto income. Investors, traders, and miners now face a more complex tax landscape.

Knowing these changes and their impact on your crypto activities is essential to stay compliant and optimize your tax strategy.

Before 2023, Portugal was a notably favored destination for crypto investors due to its tax-free regime for individual crypto holdings. With new laws effective from January 1, 2023, Portugal now taxes short-term capital gains on crypto holdings at a flat rate of 28% if they are sold within 365 days of acquisition.

Holdings longer than one year remain tax-exempt in most cases, but this exemption doesn't apply to all types of tokens. Tokens that function like securities or crypto held in certain non-EU/EEA jurisdictions are subject to different rules.

Additionally, income from activities such as staking, lending, mining, and professional trading is taxed progressively. Rates range from 14.5% to 53%, depending on your overall income bracket.

Under Portugal's Personal Income Tax Code (PIT Code), crypto income is divided into three primary categories:

1. Capital Income (Category E): This includes passive income from crypto activities such as staking or lending, taxed at a flat rate of 28%.

2. Capital Gains (Category G): Profits from crypto held for less than 365 days are taxed at 28%. For long-term holdings (over 365 days), capital gains are generally tax-exempt unless the tokens are classified as securities or held outside the European Economic Area (EEA).

3. Self-Employment Income (Category B): Income from professional trading, mining, or transaction validation is taxed as self-employment income, with progressive rates ranging from 14.5% to 53%, based on total earnings.

Crypto investors are required to report their income annually using the Modelo 3 IRS form. The reporting period runs from April 1 to June 30 each year. Taxes must be paid by August 31 for returns filed by June 30. The filing must include detailed information about all crypto transactions, such as the type of transaction, income received, and date.

Non-compliance can lead to penalties ranging from €200 to €2,500, and late payments can incur fines of up to 100% of the outstanding tax.

Portugal's tax regime allows for several strategies to minimize crypto tax liabilities:

1. Hold crypto for more than a year: The most straightforward way to avoid the 28% capital gains tax is to hold your cryptocurrency for over 365 days. Long-term holdings are tax-exempt, except for certain types of tokens.

2. Make crypto donations: Crypto donations to spouses, life partners, or descendants are exempt from the 10% Stamp Duty. Additionally, donations below €500 are entirely exempt.

3. Tax planning for professional traders: If you trade crypto professionally, you can potentially deduct expenses such as electricity and equipment costs from your taxable income. Consulting a tax professional is essential to ensure you take advantage of these deductions.

Portugal's crypto tax regime remains favorable for long-term holders, but the complexity of staking, mining, and professional trading income requires careful attention. Always consult a licensed tax advisor to navigate these intricacies and ensure compliance with evolving tax laws.

Learn more about how to reduce your crypto taxes.

For businesses dealing in cryptocurrency, such as mining operations or exchanges, Portugal applies standard corporate tax rates. Income from crypto-related business activities is taxed progressively, with businesses earning up to €200,000 subject to a 15% tax rate. Miners face taxation on 95% of their gross income.

Crypto tax Portugal FAQs

When do I need to pay taxes on my cryptocurrency in Portugal?

Taxes are due by August 31 each year for returns filed by June 30. If the tax is assessed after July 31, the payment is due within one month of the assessment.

How is crypto received as salary taxed in Portugal?

If you receive cryptocurrency as part of your salary, it is taxed as regular income under Category A. Tax rates range from 14.5% to 48%, depending on your total income.

Is cryptocurrency trading taxed in Portugal?

Yes, crypto trading is generally taxed under Category G for short-term holdings (less than 365 days), which are taxed at 28%. Long-term holdings (over 365 days) may be exempt unless they are classified as securities or held in non-EEA jurisdictions.