the new paradise for Bitcoiners?

In this country, individuals and investors benefit from an absence of legislation in the field of cryptocurrency.

In a short time, Portugal has become the new tax haven for investors in cryptocurrency.

“With 0% tax on investments in cryptocurrency, Portugal has a perfect system,” explains Didi Taihuttu, a Dutchman who settled in this Iberian country to take advantage of a legal vacuum that limits the taxation of these virtual assets. . “It’s a paradise for Bitcoiners,” stresses the forty, who became famous for making a fortune by investing all his savings in this technology created fifteen years ago, during a telephone interview with AFP.

After radically changing his life five years ago, this father has now settled in the south of Portugal, where he wants to found the first “crypto village in Europe”, with the initial construction of 25 houses to bid “bitcoiners” welcome. from all over the world.

For investors like him, “Portugal has become very attractive due to the lack of legislation in this area,” explains Susana Duarte, a lawyer at the Abreu firm, which is experiencing increasing demand from foreigners wishing to settle in Portugal for this reason.

Under Portuguese law, transactions in cryptocurrencies (bitcoin, ethereum, solana, dogecoin, etc.) are “not taxable” because they are not considered currencies or financial assets, according to a 2016 tax statement.

Individuals are not required to pay VAT or capital gains tax on the purchase and sale of assets, and only professional activities that are remunerated in crypto assets are taxed.

“Very liquid” taxation

Like Malta in particular, Portugal is thus an exception in Europe, at least for the time being, because the Lisbon government, a socialist executive that was renewed in January last year by a comfortable majority, has recognized that it will have to look at the case.

So far, his position is to wait for the adoption of a “common strategy” at European level, had stated before the election Secretary of State for Fiscal Affairs Antonio Mendonça Mendes to the weekly magazine Expresso.

“Portugal is one of the destinations that attracts Europeans, with very, very low taxation for crypto. On the other hand, we do not necessarily recommend it because it is not a long-term strategy for the government to attract companies from the sector, but rather a legal vacuum “, confirms a London-based tax lawyer who wishes to remain anonymous because of his advice on fortunes in cryptocurrencies.

“I bet the city in ten years’ time will be milder than Portugal,” he adds, while Britain is one of the European countries wishing to become home to cryptocurrencies on the old continent, and the UK Treasury has announced at the outset of April on new, more flexible rules for this sector.

Risk of “bubble”

“Portugal has become a tax haven”, laments Mariana Mortagua, deputy for the Left Bloc (extreme left), for her part, which calls for urgent regulation.

“It is difficult to justify taxing other financial assets at around 28% and not cryptocurrencies,” also acknowledges Pedro Borges, head of Criptoloja, the first digital trading platform registered with the Portuguese bank.

Concerned that the cryptocurrency market has reached the size of subprime loans, causing the last major financial crisis, the European Central Bank (ECB) has called for its international regulation.

Regulators need to “move faster” to ensure that cryptocurrencies “do not trigger an anarchic risk-taking madness”, synonymous with a “bubble”, said this week Fabio Panetta, a member of the ECB’s Executive Board.

But for Didi Taihuttu and his “bitcoin family”, Portugal would make a “mistake” if it were to change the legislation, which he says provides a unique opportunity for development.

According to the Dutch investor, this country could be the global “nerve center” for digital currencies for companies in the blockchain sector, the technology at the heart of the creation and use of cryptocurrencies.

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