cryptocurrency: Portugal taxes cryptocurrencies, solving the legal loophole

Lisbon: Portugal intends to fill the legal void that prevents the taxation of virtual activities that made them particularly attractive cryptocurrency investors, Portugal’s finance minister said Thursday.

“The government intends to legislate on this issue, we will not keep this vacuum,” Fernando Medina said at a meeting of foreign journalists in Lisbon.

The government wants to present “as quickly as possible” a new legal framework that would ensure a balance between fair taxes and international competitiveness, he said.

Portugal is currently one of the few countries in Europe where cryptocurrency transactions are not “taxable” because they are not considered foreign currencies or financial assets, according to a 2016 ruling of taxes administration which remains in force.

Individuals do not have to pay VAT or capital gains taxes on their purchases and sales of goods, and only businesses paid for in cryptocurrencies are taxed.

Pending new tax rules, cryptocurrency investments continue to gain ground, particularly in the real estate sector.

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The first sale of a paid apartment bitcoinwithout conversion into euro, it was carried out in early May.

The deal is unprecedented “in Portugal and Europe,” according to real estate agency Zome, which brokered the sale.

The three-bedroom house, worth 110,000 euros (120,000 dollars), was sold for three bitcoins in Braga, a major city in northwestern Portugal.

“Thanks to a new regulation approved by the notarial association at the end of April”, real estate transactions in cryptocurrencies must be preceded by a “more in-depth” verification procedure than a traditional sale, to “verify the origin of the funds pursuant to money laundering law, “Zome spokesman Carlos Santos told AFP.

The agency, which has launched a portal with around 3,000 properties at the price of bitcoin, sees new development opportunities despite the turmoil in the crypto markets in recent weeks.

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