Portugal Might Announce Tax for Crypto Earnings
Portugal seems to be ending the era of crypto paradise; Because the government is considering introducing a crypto profit tax. According to the Portuguese Minister of Finance, Portugal will follow other countries in proper crypto regulation. Many countries already have systems, many of them building their models on this theme. Portugal will build its models. However, the exact date is unknown, with the country aiming to adapt legislation and taxes.
According to the Minister, this is an area with more knowledge and progress. Portugal currently considers cryptocurrency not as an asset but as a currency. This means that businesses that provide cryptocurrency services are subject to taxation. Individuals who invest in them are not subject to taxation. Portugal was a crypto paradise with a net profit margin of zero. Meanwhile, the country’s capital Lisbon has become a global crypto center.
According to Abreu Advogados, associate partner, there is no specific law; it is just a lack of regulation. This is what led to zero taxes in Portugal. This, along with the understanding published by the Portuguese tax authority in 2016, meant that only crypto-related businesses could be taxed. Currently, the standard capital gains tax for residents in Portugal is 28%. Private income tax varies from 14.5% to 48%. The corporate income tax rate is unchanged at 21%; however, local and state taxes are also. It is expected that the government will adhere to “tax justice” and “efficiency” principles when completing the crypto taxation approach.
Crypto Tax-Free Regions
Portugal was just one of the crypto-tax-free countries where those interested in saving their crypto assets could move. These include Germany, El Salvador, Malaysia, the Cayman Islands, Malta, Switzerland, Belarus, Singapore, and Puerto Rico. Germany, for example, is one of the most taxable countries in Europe. However, cryptocurrency has an exciting approach. Germany does not see crypto as a capital asset. If you decide to keep your cryptocurrency for more than a year and then sell it later, not a single cent will be taxed. In addition, income tax does not apply to the redemption of crypto-assets utility tokens, which entitle you to certain privileges, such as networking or receiving a particular product.
Another example is El Salvador, which became the first country in September last year, which accepts Bitcoin as a legal means of payment. As a result, citizens can buy everything from food to home using Bitcoin.
2022 Collapse – Will Crypto Return?
In the first half of May 2022, cryptocurrency markets were hit by a storm. High variability and problems in the system bothered investors. The Terra, valued at more than $50 billion at its peak in April 2022, has suffered a dramatic crash. The fall of Terra Stabilcoin, TerraUSD, has exacerbated investor sentiment. This led to the fall of Bitcoin to its lowest level in the last 14 months, up to $25,000. It was the crypto market crash of 2022.
The Luna Foundation Guard, created to protect the UST dollar bitcoin reserve, played a vital role in the recent Bitcoin price crash when it sold 80,000 bitcoins in a failed attempt to replicate the UST. However, it is worth noting that the start of the global monetary tightening cycle has already led to the gradual sale of risk assets, from stocks to cryptocurrencies. Terra’s failure may be the inscription on the wall for the next long crypto winter.
However, not everything is lost. Many insiders in the industry welcome the recent collapse of cryptocurrency. It focuses on the development of the blockchain industry. In 2021, cryptocurrency prices rose to new heights. This was boosted by ultra-low interest rates, and increasing retail investor base, and institutional investor participation. By November 2021, BTC had reached an all-time high of $68,789.
Conclusion
The rest of the cryptocurrency market followed suit as Ether broke its record high in November 2021 and peaked at $4,891. But 2022 brought a different story. High inflation in the United States and globally has forced central banks to resign to reduce inflation by reducing cheap liquidity.
Withdrawal of liquidity from financial systems and markets has led to falling prices for risky assets. As of May 16, BTC had fallen more than 37% over the year, reaching $ 29,900. Bellwether cryptocurrency is currently 56% higher than its all-time high. The native token of Ethereum, the leader of the innovative contract platform, ETH, has dropped 46% to date, as of May 16, above the $2000 mark. ETH is about 58% below its record high current prices.
