Crypto Tax Policy Review in Portugal: Future Changes and What Investors Need to Know

Portugal used to be the go-to place for crypto investors who wanted to avoid taxes. If you held Bitcoin or Ethereum for more than a year, you paid zero in capital gains tax. That changed in 2023. The government didn’t shut the door - it just rewired the lock. Now, Portugal still offers one of the most favorable crypto tax systems in Europe, but only if you play by the new rules.

What’s Changed Since 2023?

Before 2023, Portugal didn’t tax crypto at all - not on trades, not on staking, not on selling. That made it a magnet for digital nomads and long-term holders. But in the 2023 State Budget, lawmakers introduced a clear, three-tiered system to classify crypto income. The goal? Stop tax avoidance without chasing away investors.

Now, your crypto activity falls into one of three buckets:

• Category G (Capital Gains): Selling crypto for euros. If you held it less than 365 days, you pay 28%. If you held it longer? Zero tax. This is still the biggest perk.
• Category E (Passive Income): Staking, lending, or earning interest in crypto. Taxed at 28% - but only when you convert to euros. If you keep your rewards in crypto, you don’t pay until you sell.
• Category B (Professional Activity): If you’re trading daily, mining, or running a crypto business, you’re a professional. Your income is taxed between 14.5% and 53%, depending on your total earnings. But there’s a twist: only 15% of your gross income counts as taxable for trading, and 95% for mining (thanks to energy concerns).

This system isn’t about punishing traders. It’s about separating the casual investor from the full-time operator. If you’re holding Bitcoin for five years? You’re golden. If you’re buying and selling every week? You’re paying tax - but still less than in most of Europe.

How the 365-Day Rule Works

The 365-day holding period is the backbone of Portugal’s crypto tax strategy. It’s simple, clear, and powerful.

Let’s say you bought 1 BTC in March 2024 for €30,000. You sell it in April 2025 for €40,000. That’s 397 days later. You owe nothing. The profit? Tax-free.

But if you sold it in February 2025? That’s 336 days. You owe 28% on the €10,000 gain - €2,800.

The system uses FIFO (First In, First Out). So if you bought BTC at different prices, the system assumes you sold the oldest coins first. This matters if you’ve been accumulating over years. Tools like CoinTracking or Koinly help track this automatically.

Important: The tax exemption only applies if you or your exchange is based in the EU, EEA, or a country with a tax treaty with Portugal. If you’re using a U.S.-based exchange and don’t report to Portugal, you could still be liable. Portugal doesn’t have direct access to U.S. exchange data - yet - but that’s changing.

Staking and Lending: The Deferred Tax Trick

Staking rewards used to be a gray area. Now, they’re clearly defined: taxed as passive income (Category E) at 28% - but only when you convert to euros.

Here’s how it plays out in real life:

• You stake ETH and earn 0.5 ETH in rewards in January 2025.
• You don’t sell it. You hold it.
• In June 2025, you sell that 0.5 ETH for €1,800.
• You pay 28% tax on €1,800 - €504.

That’s a huge advantage. You’re not paying tax on every reward as it arrives. You’re only taxed when you cash out. That lets your rewards compound without immediate tax drag. Compare that to the UK or Germany, where staking rewards are taxed as income the moment they hit your wallet.

Professional vs. Casual: Where’s the Line?

This is the trickiest part. How do you know if you’re a casual investor or a professional trader?

The Portuguese tax authority doesn’t give a hard number - but here’s what they look at:

• Frequency: Are you trading 5+ times a week?
• Time spent: Are you analyzing charts daily, using bots, or running a newsletter?
• Income source: Is crypto your main income?
• Tools used: Do you use advanced software like TradingView or Python scripts?

If you’re doing this as a side hustle and make €15,000 a year from crypto? You’re probably in Category G. If you’re trading full-time and making €80,000? You’re likely in Category B.

Here’s the catch: Category B lets you deduct expenses. If you’re a miner, you can claim electricity, hardware, and cooling costs. If you’re a trader, you can deduct software subscriptions, internet, and even a home office. That’s not available under Category G.

How Portugal Compares to the Rest of Europe

Portugal isn’t the only country with crypto tax rules - but it’s one of the few that actually rewards long-term holding.

Comparison of Crypto Tax Rules in Europe (2025)

Country	Short-Term Gain Tax	Long-Term Gain Tax	Staking Tax	Trading Fees Deductible?
Portugal	28%	0%	28% (on fiat conversion)	Yes (if professional)
Germany	Up to 45%	0% (after 1 year)	Income tax (up to 45%)	Yes
France	30% flat	30% flat	30% flat	No
United Kingdom	10-20%	10-20%	20-45%	Yes

Portugal wins on long-term holding. Germany matches it on the 1-year exemption, but taxes staking as income. France hits everyone with 30% - no exceptions. The UK taxes everything, even after years of holding. Portugal’s 28% short-term rate is lower than France’s and more predictable than Germany’s progressive scale.

What’s Coming Next? Future Changes

Portugal’s system is stable - for now. But the EU is rolling out MiCAR (Markets in Cryptoassets Regulation), which will standardize licensing and reporting across member states by 2026.

Portugal won’t change its tax rates to match MiCAR - it keeps its own tax sovereignty. But it will have to improve reporting. The Bank of Portugal is already building systems to monitor crypto flows. The tax authority (AT) is hiring blockchain analysts and testing tools to trace wallet addresses.

Expect tighter rules on:

• Unregulated exchanges - if you use a non-EU platform, you might need to self-report more.
• Professional traders - the €200,000 income threshold for simplified Category B may drop.
• Staking protocols - if they’re based in Portugal, they may be required to report rewards.

Don’t expect Portugal to start taxing long-term gains. That would scare off the very people who moved there for the tax benefits - and they’re the ones spending money on homes, restaurants, and local services.

What You Should Do Now

If you’re holding crypto in Portugal, here’s your action plan:

1. Track your purchase dates. Use a crypto tax tool. Don’t rely on exchange statements - they’re often wrong.
2. Hold for at least 365 days. That’s your golden rule. If you’re planning to sell, wait.
3. Separate your activities. If you’re trading daily, treat it like a business. Keep receipts, track expenses, and file under Category B.
4. Don’t convert staking rewards immediately. Let them sit in crypto. Tax only when you need euros.
5. Know your exchange. Use EU-based platforms like Bitpanda or Kraken EU. They report to Portugal. U.S. exchanges? You’re on the hook for self-reporting.

Portugal isn’t a tax loophole anymore. It’s a smart, balanced system. If you’re a long-term holder, you still get the best deal in Europe. If you’re an active trader, you pay - but fairly. And if you’re building a business around crypto? Portugal still gives you room to grow.

Frequently Asked Questions