Best Bitcoin Exchange for Portugal

Tax authority says that there is no legal framework to tax profits made from buying, selling and exchanging cryptocurrencies. Those who have profited from digital coins do not need to hand over money to the tax authorities.

Anyone who makes money buying and selling cryptocurrencies, be it the famous bitcoin or any other, is safe from paying IRS in Portugal on that income. A Portuguese taxpayer questioned the tax authority on how gains from virtual currencies should be taxed and the Portuguese tax authorities’ response could not be more advantageous to the investor: there is no framework in Portuguese law to consider that the gains are taxable. Only in a scenario in which a person had a professional or business activity open to buy and sell cryptocurrencies would he end up being taxed on IRS (in category B, that of green receipts) – this is a very unlikely scenario.

Fall of bitcoin leaves users between fear and trust

Cryptocurrencies, which are traded on online exchanges that operate essentially on the margin of regulation, had astronomical valuations throughout 2017. Some investors have multiplied their funds and many have bought digital currencies in the hope of quick profits. The overwhelming majority of cryptocurrencies have no practical application (even bitcoin is not widely accepted as a form of payment) and the main motivation for buying them is the expectation of being able to sell them at higher prices.

The tax authority’s decision comes in a week when bitcoin and other cryptocurrencies are in sharp decline. The fall in price reflects fears about bans and regulations in some countries, and also a negative sentiment that has spread to the general press and specialized websites.

At 5.10 p.m. this Wednesday, the bitcoin was worth about 10,300 dollars, thus approaching the psychological barrier of ten thousand dollars. Since the beginning of the week, bitcoin had devalued about 30%, according to the website CoinMarketCap. The ethereum (the second most popular cryptocurrency) had fallen 34%, to about 900 dollars. The ripple (a trading platform that wants to operate within the banking system) had a great appreciation in recent weeks, but had suffered a decline of 43% since Monday, to 1.06 dollars. According to CoinMarketCap, 95 of the 100 most popular cryptocurrencies were in decline.

In the decision released this Wednesday, the tax authorities begin by explaining that, although they are not technically considered a currency “because they do not have legal tender or release power” in the country, the cryptocurrencies can be exchanged for a real currency depending on demand. A fact that required a question: what tax treatment should be given either to the gains made from buying and selling, or to the exchange of the virtual currency for euros, dollars or any other currency?

As a starting point for the analysis, the IRS services of the tax authorities admit that income from this activity “may, in theory, be included in three categories of income”: asset increases, capital income or business/professional income (category B, for those who issue green receipts). But in light of the law there is no framework, at least for the time being, that allows these gains to be classified as income from these categories – and this is what justifies that there is no IRS to pay.

The tax authorities explain that gains cannot be taxed as capital gains because the law has a “closed typification” that foresees that this only happens with the “gains derived from the facts” foreseen in the IRS code, as is the case of shares and other securities (for example, shares). And virtual currencies do not fall under any of the cases listed in the law.

In practice, a bitcoin does not represent “any right to receive any amount”; if there is a valuation it is not “based on any underlying asset” because the value “is merely determined by the supply and demand of the same (and by the creation of cryptomeda depending on its use)”; and at the same time it is not considered a financial product or security.

Why are they not also considered as capital income? In this case, says the tax authorities, the standard “is constructed in an open manner” and only income “generated by the mere application of capital, i.e. the legal fruits are taxed”, such as “royalties produced by the loss of the substance of the producer”, which is not the case, where “the income produced is obtained by the sale of the right”, falls within this classification.

About Portugal

Portugal (República Portuguesa) is a European state in the west of the Iberian Peninsula. To the west and south it is bordered by the Atlantic Ocean, to the east and north by Spain. Portugal is a member of the Eu and the Eurozone.

Climate

• Oceanic and Mediterranean climate. The north is Atlantic, to the south it is increasingly Mediterranean.
• The summers are hot and dry (24°C in July), the winters are mild and humid (10°C in January).
• Temperatures increase from north to south. Rainfall decreases from north (over 2000 mm) to south (300 mm).

Origin of the name

The country name developed from the Roman name Portus and Cale – settlements near the today’s Porte.

Ethnic groups

homogenous population; less than 100,000 Africans who immigrated to their motherland after decolonisation. Eastern Europeans have also migrated to Portugal since 1990; proportion of foreigners in 2015: 3.8%.

Interesting to know

• Almost all motorways are subject to tolls and billing is via electronic payment systems.
• The Portuguese are very hospitable and polite.
• Often smaller shops close between 13 and 15 o’clock.
• At cheese, meat, bread and post counters, a number must be drawn before starting work.
• 93% of the Portuguese are Catholics.
• Porto is the second largest city, has been extensively restored and declared a UNESCO World Heritage Site.
• Portugal has an 830 km long Atlantic coast.
• Portugal has beautiful and varied landscapes.
• Portugal was once one of the largest seafaring nations in the world.
• Because tap water contains a lot of chlorine, you should not drink tap water.
• Travellers should protect themselves against ticks and sand flies in summer.

History of Portugal

• First settlement about 500,000 years ago.
• 800 BC Phoenicians establish trading bases in the Algarve.
• 6th to 3rd centuries B.C. Immigration of the Celts, who mixed with the Iberians.
• 206 B.C. strong Romanization after the Second Punic War.
• 8th century Moorish rule.
• 15th century Portugal rises to become the leading European trading and naval power, becomes a colonial power in the 16th century.
• 1580 Portugal falls to the Spanish Habsburgs for dynastic reasons.
• 1755 an earthquake destroys large parts of the capital Lisbon.
• 1761 Attack of Spain and France on the country, which is repelled however.
• 1821 Liberal Revolution: Portugal receives a constitution for the first time in its history.
• 1910 End of the monarchy with the proclamation of the republic, King Manuel II flees into exile.
• 1926 Military coup ends the first republic.
• Portugal remains neutral during the Second World War.
• Portugal is a founding member of NATO, created in 1949.
• From 1960 colonial war in Africa.
• 1974 renewed military coup with the following dictatorship
• The onset of the economic crisis leads to a general popular uprising, the Carnation Revolution.
• Constitution of 1976 briefly defines the transition to socialism as a state goal.
• The constitutional amendment, which came into force in 1982, replaces the Revolutionary Council, which had previously been important, with a constitutional court modelled on other democratic states.