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Cryptocurrency Regulations In Portugal: An Overview

Published August 15, 2023 8:42 AM
Andrew Kamsky
Published August 15, 2023 8:42 AM

Key Takeaways

  • Portugal’s regulatory environment aims to support crypto businesses while categorizing various taxation tiers.
  • Portugal tax authority imposes 28% tax for short-term gains, whereas long-term holdings are exempt.
  • ICOs and tokens thrive in Portugal, while guidance suggests CMVM consultation for token legality.
  • Portugal aligns with the EU to innovate in crypto, emphasizing talent and regulatory improvements.

Portugal has positioned itself as a crypto-friendly country, embracing the potential benefits that digital currencies and blockchain technology can offer to its economy. This approach aims to strike a balance between fostering technological advancement and safeguarding against potential risks such as money laundering, fraud, and tax evasion.

The country has taken several steps to provide clarity in terms of regulatory expectations, taxation, and licensing for crypto-related activities. Portugal’s regulatory approach seeks to provide legal certainty for businesses and individuals engaging in cryptocurrency-related activities while addressing potential risks associated with the technology.

Blockchain Technology And Innovation In Portugal

Portugal has taken significant steps to promote innovation and the adoption of blockchain technology. The country has shown an entrepreneurial spirit and a commitment to fostering innovation, making it an appealing environment for blockchain-related projects and businesses.

Lisbon, the capital city of Portugal, has silently emerged as a prominent technology hub, particularly for blockchain. The city hosts technology conferences, such as the Web Summit, attracting thousands of professionals annually, and fostering a thriving ecosystem. 

Lisbon benefits from a strong pipeline of skilled talent from local universities and is attracting talent from abroad by offering residency and citizenship incentives. Lisbon’s trajectory as an upcoming tech powerhouse appears promising, due to its resilient spirit, pleasant climate, and rich cultural heritage.

Legislative Landscape Of Cryptocurrencies In Portugal

Here’s an overview on crypto legislation and regulations in Portugal:

Portugal Crypto Tax Law For 2023 

The Portugal Crypto Tax Law for 2023, which has been approved by the Portuguese Parliament, seeks to regulate crypto-related activities by imposing a flat tax rate of 28% on cryptocurrency gains. This means profits earned from digital assets held for under a year will be taxed at a 28% rate, while crypto held longer will be tax-exempt. This law requires legal compliance from all investors who own or trade cryptocurrencies. 

Is Crypto Harvesting Allowed In Portugal?

Crypto harvesting, also known as crypto tax-loss harvesting, is a strategy used by cryptocurrency investors to reduce their tax liabilities by selling cryptocurrencies at a loss to offset potential capital gains from other investments. It is allowed in Portugal.

The country has taken steps to create a supportive regulatory environment for cryptocurrency-related activities. This initiative aims to reduce the regulatory and legal burdens faced by crypto businesses as they develop and experiment with new technologies.

Taxation Of cryptocurrencies In Portugal 

The Portuguese Tax and Customs Authority (PTA) oversees crypto taxation in Portugal. Taxation of crypto in Portugal can be categorized into different tiers or categories of taxation. These categories include: 

Category E 

Income earned from passive crypto investments received in fiat currency will be liable for a fixed tax rate of 28%, specifically when the income does not fall under any of the categories mentioned below.

Category G 

Portugal’s cryptocurrency taxation, profits gained from selling cryptocurrency owned for under a year will face a fixed 28% tax when converted into fiat money. For Portuguese tax residents, a progressive tax scale spanning from 14.5% to 53% is applicable if these gains are combined.

Notably, the 365-day guideline doesn’t affect “investment/security tokens,” which follow taxation akin to securities. Exceptions emerge if gains originate from taxable individuals or entities beyond the European Economic Area, without specific agreements in place.

Category B 

Under Category B, activities related to the creation of crypto assets, such as mining, or the validation of crypto transactions using consensus mechanisms, even when conducted in exchange for fiat currency, will be subject to a gradual tax scale ranging from 14.5% to 53%. 

Additionally, a fixed presumption of 5% in expenses will be considered for income generated from mining activities. Furthermore, during the sale of the mined crypto, 85% of the income will be presumed as expenses. For instance, if an individual earns €1,000 from mining, they will only be taxed on €950 based on the first scenario, or €150 based on the latter scenario. It’s important to note that discontinuing self-employment activities is treated on par with selling cryptocurrency.

Definition And Classification Of Cryptocurrencies As Per The Portuguese Law

It is worth noting that the classification of cryptocurrencies for tax purposes includes different categories as explained in the sub-headings laid out above that each make reference to either capital income, capital gains income, and self-employment income. 

Each category carries specific tax rates and rules, with capital gains from cryptocurrency sales held for less than a year being taxed at a flat rate of 28%. Longer-term holdings are generally tax-free. 

Unless cryptocurrency trading qualifies as a taxpayer’s professional or entrepreneurial activity, the PTA holds the view that capital gains arising from cryptocurrency sales are exempt from Personal Income Tax.

Furthermore, Portugal’s stance on cryptocurrencies has evolved over the years, transitioning from a relatively tax-free environment for crypto to a more structured taxation approach in recent times.

Cryptocurrency Donations

Donations involving cryptocurrency will be subject to a Stamp Duty of 10% or a 4% fee pertaining to charges from crypto service providers acting as intermediaries. These rates apply to the value of the donation and are applicable when the transactions are considered to occur within Portuguese territory. However, donations between spouses, life-partners, ascendants, and descendants, as well as donations below €500, are exempt from this tax.

Taxation Of Non-Fungible Tokens

In addition, Non-Fungible Tokens (NFTs) are not subject to taxation, but this exemption applies only to NFTs that are genuinely unique and non-fungible. This distinction may lead to disagreements in interpretation, as the taxation rules differ not only for  NFTs and investment/security tokens but also within the categories of utility tokens and commodity/currency/payment tokens.

Registration Of Cryptocurrency Businesses

In Portugal, the licensing and registration requirements for cryptocurrency businesses involve said businesses to register with the Bank of Portugal before engaging in activities with cryptocurrencies and other virtual assets professionally. A virtual asset, in the eyes of the Portuguese government, can be compared to a digital representation that holds value and is used for investing, exchanging, transferring, and trading electronically. 

The registration process with the Bank of Portugal assesses the suitability and competence of the applying business. Essential information, such as details about the applicant entity, ultimate beneficial owners (UBOs), shareholding holders, business plans, internal procedures, members of supervisory and management bodies, and anti-money laundering and anti-terrorist financing measures, needs to be included in the application. 

It’s worth noting that businesses operating under the regulation of free provision of services in Portugal are exempt from the duty of prior registration as stipulated in Article 112/A of the Law to Combat Money Laundering and Terrorist Financing.

Initial Coin Offerings (ICOs) and Token Sales

In Portugal, ICOs and token sales have gained traction as fundraising methods for companies and projects. These sales involve the issuance and distribution of digital tokens, often without granting ownership in the issuing entity but potentially offering utility or governance rights. 

The evaluation of each ICO in Portugal is unique and focuses on the distinction between utility and security tokens. Tokens that reflect project rights, software access, or service access are subject to consumer protection laws. ICOs that use tokens to share financial gains or other economic interests may be subject to securities restrictions. 

Participation-only tokens for platform development surveys that lack any financial aspects are not regarded as securities. Tokens that reflect private economic rights and their closeness to traditional securities are two elements in the appraisal of securities. Securities law concerns may result from investor expectations for returns, such as earnings or value growth.

Therefore, while tokens qualifying as securities under the Portuguese Securities Code are subject to specific rules governing security tokens and financial instruments, tokens meeting the criteria for electronic money entail a requirement for an E-money institution license. 

There are no clear rules preventing ICOs from launching in Portugal, however, any entities wishing to launch an ICO are encouraged  to clarify  token legality with the CMVM, the Portuguese Securities Market Commission. 


As of 2023, Portugal maintains a somewhat relaxed and open approach to cryptocurrency and blockchain innovation. The country is working on aligning with the EU’s regulatory improvements, such as the Markets in Crypto-Assets (MiCA) regulation, which aims to provide legal clarity, prevent misuse of crypto assets, and encourage crypto-based innovations. 

The new regulation also focuses on environmental responsibilities and the supervision of stablecoins. Cryptocurrency businesses are expected to contribute to reducing the carbon footprint of cryptocurrencies and adhere to specific reporting requirements. Moreover, the EU-wide regulation enhances the monitoring of non-compliant crypto asset service providers and may introduce a single pan-EU AML authority in the future.


Is Portugal crypto-friendly? 

Portugal embraces crypto for economic benefits, balancing tech growth and risk prevention like money laundering and tax evasion.

How does Portugal tax crypto profits? 

Short-term gains (under a year) are taxed at 28%, while long-term holdings are tax-exempt. The Portuguese regulation set in place, however, aims for legal clarity.

Are ICOs regulated in Portugal? 

ICOs and token sales are gaining ground, with no explicit restrictions. However, the government encourages those wishing to launch ICOs to clarify token legality with the CMVM, a financial public authority.

What’s Portugal’s crypto stance? 

Portugal fosters innovation, offers tax clarity, and attracts talent. The nation aligns with EU regulations for crypto asset improvements.

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