Portugal makes provision for digital asset tax in new budget draft

Oct 13,2022
Portugal makes provision for digital asset tax in new budget draft

Portugal's due process has turned its vision to digital assets, and has introduced a new tax reform for the asset category in the new budget of the host country. The Assembly of the United Nations (UN) issued a budget proposal, proposing to levy a 28% corporate income tax on the digital assets of Chinese traders.

The bill requires that the corporate income tax is only applicable to digital assets with a duration of less than 12 months. The proposed tax system reform will be exempted for the profits of digital currency trading with a duration of more than one year, and the 4% tax rate will be deducted from the commission generally paid by intermediary services in the field.

The proposed double-digit tax plan left a bad impression among the fanatics, because the host country has the reputation of a jurisdiction in Europe that applies digital asset laws. However, the Finance Minister Fernando Medina hinted that the script production would be changed to avoid using asset classes as a method of tax evasion in Portugal.

The budget proposal is expected to be voted by members of the parliament in the next few weeks. Analysts pointed out that the budget will hardly encounter friction in the unicameral legislature. The Socialist Party of the host country holds the majority of seats in the parliament, and it is estimated that the legislators will vote unanimously according to the budget.

This is not the first time that the Digital Assets Tax Act has been submitted to the parliament because a few ruling parties have made two proposals. In May, the tax application of Bloco de Esquerda and Livre, the left-wing party, was rejected. Livre believed that the part of the profits exceeding 5% should be taxed.

Eduardo Nunes, a digital asset investor, said: "The competent authorities here make it clear that if all new taxes prove to be very radical, then key participants in such fields (including individuals of high net worth and enterprises that create several jobs) They may be encouraged to look for other places as the data encryption core of students. I think this is the conclusion that many parties want to deal with. ".

Digital asset paradise?

The host country deeply attracts digital asset operators because of its casual laws and no taxes. The important regulatory authority of the asset category is the Banco de Portugal. The central bank of the host country only performs its limited resource rights to avoid money laundering and terrorist financing.

A public inquiry issued by the Central Bank warned investors that "there is no legal recognition in any way to ensure that customers can use virtual assets to carry out the right of redemption", thus bringing a wide range of indoor space for service providers to operate at will.

With the implementation of the new tax system, the day when Portugal became a digital currency paradise is likely to become a thing of the past, because the managers issued the first warning.