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. Buy Bitcoin in 2020, hold it for three years, sell it in Lisbon - no tax. That’s the story everyone knew. But that changed in 2023. The Portuguese government didn’t shut the door on crypto. They just rewired the rules. If you’re holding crypto in Portugal today, or thinking about moving there, you need to understand the new system - and what’s coming next.

What Changed in 2023?

The big shift came with the 2023 State Budget. Portugal stopped treating all crypto gains as tax-free. Instead, they created a three-part system that treats different types of crypto activity differently. It’s not about whether you made money - it’s about how you made it.

• Category G (Capital Gains): This is for regular investors. If you buy Bitcoin and sell it later, it’s here. Hold it less than a year? Pay 28%. Hold it over 365 days? Zero tax. That’s still the biggest perk.
• Category E (Passive Income): Staking, lending, yield farming - this is where those rewards land. You pay 28% flat, but only when you turn the crypto into euros. If you get 0.5 ETH as a staking reward and leave it in your wallet? No tax yet.
• Category B (Professional Activity): If you’re trading daily, running a mining rig, or making crypto your full-time job, you’re in this bucket. Here, the tax isn’t on your profits - it’s on your income. For most traders, only 15% of your gross income counts as taxable. Miners? 95% of gross receipts are taxed because of energy use.

The key takeaway? Portugal still rewards long-term holding. If you’re not trading every week, you’re still in a great spot.

How Capital Gains Are Calculated

The tax authority doesn’t guess. They use FIFO - First In, First Out. That means when you sell 1 BTC, they look at the first BTC you bought, not the most recent one. If you bought BTC in January 2023 and sold it in February 2024, that’s 397 days - still under the 365-day mark. You owe 28%.

But if you bought it in January 2023 and sold it in February 2025? That’s 761 days. Tax-free. The system is built to encourage patience. It’s not a loophole - it’s a policy.

Record-keeping matters more than ever. You need to track every purchase, every sale, every swap. A mistake here can turn a tax-free gain into a taxable one. Tools like CoinTracking, Koinly, or even a well-organized spreadsheet are no longer optional.

Staking and Lending: The Delayed Tax Trap

Many people think staking rewards are taxed when they arrive. They’re not. Portugal taxes you only when you convert crypto to fiat. So if you stake ETH and get 0.02 ETH every month, you can keep stacking it. No tax. Then, in 2026, you sell all your accumulated rewards? That’s when the 28% hits.

This creates a hidden risk. You might think you’re doing fine - your wallet is growing. But if you suddenly cash out $50,000 worth of staking rewards all at once, you’re looking at a $14,000 tax bill. It’s not a surprise - it’s a timing trap.

Smart investors spread out their cash-outs. Sell a little each month. Keep your tax liability manageable. Don’t wait for a big payday.

Professional vs. Hobbyist: Where Do You Draw the Line?

This is the grayest area. If you trade crypto once a week, are you a hobbyist? What if you do 10 trades a day? What if you run a small mining farm from your garage?

The tax office doesn’t give you a checklist. But they look at behavior. Regular, frequent trades? High volume? Using technical analysis tools? That’s a red flag. If you’re making more than €200,000 a year from crypto, you’re definitely in Category B. Below that? You might qualify for the 15% simplified income calculation.

But here’s the catch: if you claim Category B, you lose the long-term capital gains exemption. Every sale becomes taxable income. So if you’re a casual trader who occasionally sells, staying in Category G is smarter. If you’re running a full-time operation, Category B gives you a better rate - but you pay more in paperwork.

How Portugal Compares to the Rest of Europe

Portugal isn’t the only country with crypto rules. But it’s one of the few that still offers a true long-term exemption.

• Germany: Also tax-free after one year. But if you sell within 12 months, you pay your personal income tax rate - up to 45%.
• France: 30% flat tax on all crypto gains, no matter how long you hold. No exemptions.
• United Kingdom: Capital gains tax up to 20%, with a £3,000 annual allowance. No holding period exemption. Even if you hold for 10 years, you still pay.

Portugal’s 28% short-term rate is lower than France’s 30%. And the long-term exemption? That’s unique in Europe. The UK and France tax you regardless of how long you wait. Portugal rewards patience.

What’s Coming Next?

Portugal’s system isn’t set in stone. The EU’s MiCAR regulation will roll out fully in 2026. It won’t touch tax rates - that’s still up to each country. But it will force crypto exchanges to report user data to tax authorities across the bloc.

Right now, Portugal’s tax office doesn’t have perfect visibility into crypto wallets. That’s changing. By 2027, they’ll have automated systems pulling data from exchanges like Binance, Kraken, and Coinbase. If you didn’t report a trade in 2025, you’re at risk.

Expect tighter rules on professional activity classification. The €200,000 threshold for the simplified regime might drop. Staking rules could get more specific. The government isn’t cracking down on investors - it’s closing gaps for those trying to hide activity.

Who Still Benefits?

The system still works for three groups:

1. Long-term holders: Buy crypto, hold for 365+ days, sell tax-free. This is the heart of Portugal’s appeal.
2. Digital nomads: If you live in Portugal for over 183 days a year and earn outside Portugal, your foreign income is tax-free. Crypto gains from long-term holds? Also tax-free.
3. Professional traders with low volume: If you trade under €200,000 annually, you pay just 15% of your gross income - not your profits. That’s a better deal than most EU countries offer.

It doesn’t work for day traders who expect to avoid tax. It doesn’t work for people who think they can hide their holdings. But for the rest? It’s still one of the best setups in Europe.

What You Should Do Now

If you’re in Portugal or planning to move:

• Track everything: Use a crypto tax tool. Manual spreadsheets are risky.
• Hold for a year: If you’re not trading daily, wait. The tax savings are massive.
• Don’t cash out all at once: Spread sales across months to avoid a big tax bill.
• Know your category: Are you an investor or a professional? Don’t guess - document your activity.
• Prepare for enforcement: The tax office will know what you did by 2027. Be ready.

Portugal didn’t become a crypto tax haven by accident. It didn’t lose its edge in 2023 - it upgraded it. The days of no rules are over. But the days of smart, legal, tax-efficient crypto investing? They’re still very much alive.