Crypto Tax Guide

Why Portugal is a Hidden Gem for Crypto Investors

Thinking of relocating to reduce your crypto tax bill? Portugal might just be the smartest move you’ll ever make.

One of the most favorable and transparent crypto tax regimes in Europe

Yes, Portugal introduced new tax rules for crypto in 2023—but here’s the thing: the country still offers one of the most favorable and transparent crypto tax regimes in Europe.

With clear rules, generous exclusions from taxation, and the ability to defer tax until conversion into fiat, Portugal offers a serious opportunity for crypto holders and investors who know how to navigate the system.

Portugal may allow you to optimize your gains and keep more of what’s yours, whether you’re:

A long-term HODLer

A DeFi explorer

Someone getting paid in crypto

If you understand the basics—or have the right guidance—Portugal might just be your ideal crypto base.

Let us break it down for you. 👇

What Even Counts as a Crypto Asset?

Portugal defines a crypto asset as any digital representation of value or rights that can be transferred or stored electronically, using blockchain or similar tech.

Good news!

Unique, non-fungible tokens (aka NFTs) are not taxed—they’re excluded from the crypto taxation rules. 🎉

Not All Crypto Income is Taxed Equally ⚖️

Since 2023, Portugal’s tax regime for crypto has evolved—but in a very strategic way. What really matters is how you earn your crypto:

HOW you earn your crypto matters!

Passive Income

Earned occasionally, like staking rewards, interest (e.g. DeFi lending), or airdrops? That’s passive income. And there’s a major bonus!

👉 Tip: Hold your crypto for more than 365 days before converting it into fiat, and it can be completely tax-free.

Active Income

Are you actively trading or mining crypto? That’s considered professional income, and it’s taxed more strictly—even if you never convert to fiat.

Why getting your classification right from the beginning is crucial!

To determine whether you’re considered a passive or active crypto investor (which significantly affects how you’re taxed), the Portuguese Tax Authority will assess the overall context of your activity—it’s not just about how many transactions you make. They will take into account several key factors, such as:

Frequency and regularity

Are you casually trading a few times a year, or actively managing your crypto daily?

Intention to generate income

Is your goal to make a profit consistently, or are your gains incidental?

Economic weight of the activity

Does this represent a significant portion of your income, or is it marginal?

These criteria are especially relevant if you’re trading, providing liquidity, farming yields, or engaging in any other structured crypto activity. If the activity is deemed habitual and intended to produce steady revenue, it may be classified as a professional or business activity—even if you’re not registered as self-employed.

Once classified as active income, your crypto gains will fall under Category B (self-employment income), and you’ll be required to follow the corresponding tax rules—including registration, invoicing, and regular reporting.

That’s why getting this classification right from the beginning is crucial. It can make a big difference in how much tax you owe—and when you owe it.

Ready to discover the tax treatment of your crypto income?

Whether you’re staking, trading, earning interest, or getting paid in tokens, let’s explore how each type of income is taxed in Portugal.

Passive Income: The Sweet Spot️

💰 Staking, Yield Farming & Lending

If you’re earning rewards just for holding crypto, that’s treated as capital income. Here’s how it works:

Taxed immediately at 28%

If rewards are paid in fiat or if the counterparty is not fiscally resident in EU, EEA, or a jurisdiction that has a tax treaty or information exchange agreement with Portugal.

Only taxed when convert to fiat

If rewards are paid in crypto, it is treated as a future capital gain.

No deductions apply—your full reward amount is taxable.

But!

Under special regimes like Non-Habitual Tax Resident Regime (NHR) or IFICI (Tax Incentive for Scientific Research and Innovation), capital income from foreign sources (non-tax havens) may be exempt. 😎

📈 Selling Crypto (Capital Gains)

Portugal applies a simple but powerful rule:

👉 No tax until you convert to fiat.

Even if you sell one crypto for another (like ETH for USDT), there’s no tax until fiat conversion—unless you change tax residency.

⏳ The big win?

Hold your crypto more than 365 days, and those gains are excluded from taxation — not exempt, but simply not subject to tax.

💡 Strategy

Convert profits to a stablecoin, hold for 365+ days, then cash out tax-free.

But here’s an important detail!

📌 It is currently debatable whether exchanging one crypto for another resets the 365-day holding period. The law is not explicit on this, and there are no official guidelines yet from the Portuguese Tax Authority or court decisions.

However, the law does state that when you exchange crypto for another crypto, the acquisition cost of the new crypto is the original historical cost of the one you gave up. Based on this, there are solid grounds to argue that the original holding period should also carry over and not reset.

Still, this remains an area of uncertainty, so caution is advised — especially in high-value transactions.

🚫 When Crypto Gains Are Not Tax-Free

The 365-day rule and the deferral of taxation only apply if your transaction counterparty is fiscally resident in the EU, EEA, or a jurisdiction that has a tax treaty or information exchange agreement with Portugal.

If that’s not the case, then the sale of crypto is immediately taxed—even if it’s just an exchange for another crypto—and holding the asset for more than 365 days doesn’t grant any exclusion from taxation.

How is the gain calculated?

The taxable gain is determined by the difference between the sale (or conversion) value and the original acquisition cost, with the possibility of deducting any necessary and effectively incurred expenses related to the acquisition and sale of the cryptoassets (e.g., transaction fees or commissions).

The standard tax rate is 28%

But you can opt for progressive tax rates up to 48% depending on your overall income.

However, if you’re under the IFICI regime, and the gains are from a foreign source not located in a tax haven, the income may be exempt from taxation.

Not sure how to structure your crypto holdings or time your conversions?

Schedule a consultation with one of our tax experts.

Other Details to Consider

📊 FIFO Method Explained

Portugal uses the FIFO method (First In, First Out) to calculate your capital gains. This means that when you sell or convert crypto, the oldest coins in your wallet are considered sold first.

When applying the 365-day rule, it’s also important to understand how long you’ve held each specific crypto unit. Because FIFO determines the order of sale, it directly affects whether a particular gain is excluded from taxation. So, accurate tracking of acquisition dates is essential to assess eligibility under the 365-day holding rule.

This rule applies within each wallet or exchange individually, so it’s important to keep precise records of acquisition dates and amounts across different platforms.

This rule can make a big difference in your final tax bill, older assets were acquired at lower prices. Be strategic when selecting wallets for withdrawals or conversions—your tax outcome might depend on it!

🟥 How Losses Are Treated

🔸 Losses involving tax havens (whenever the counterparty is located in those territories) are not deductible at all.

🔸 Other capital losses can be used to offset gains, but only if you choose to include your crypto income in your general taxable income (known as “englobamento”). These deductible losses can be carried forward for up to 5 years, which can be super helpful in years where your crypto activity is less profitable.

🔸 Important note: Losses from the sale of crypto held for more than 365 days are not deductible if the counterparty is located in the EU, EEA, or a jurisdiction that has a tax treaty or information exchange agreement with Portugal. Why? Because if those same gains had been positive, they would have been excluded from taxation—so the losses can’t be used either.

Exit Tax

🚪 What About the Exit Tax?

Leaving Portugal has tax consequences. This should be on your radar if you’re thinking about leaving Portugal:

🔔 If you give up Portuguese tax residency, it’s treated as if you sold all your crypto on that date. You’ll be taxed on the market value minus your original acquisition costs.

Unclear: Can you still apply the 365-day rule here?

There are currently no official guidelines from the Portuguese Tax Authority or case law from the courts on this specific point. We’re watching this one closely 👀

Thinking about leaving Portugal in the near future?

Before you do, talk to us about the Exit Tax and how to plan for it wisely.

Active Income: For Traders & Miners

If you earn crypto regularly, you’re seen as a freelancer or independent worker under Portuguese law. That means your income is taxed under Category B of the personal income tax system.

📊 What Are Your Options to Assess Taxable Income?

✅ Simplified Regime

If gross income < €200,000/year

Only a % of income is considered taxable:

95% for mining
15% for other crypto operations

📚 Organized Accounting

If gross income > €200,000/year

You’re taxed on net income (revenue minus actual expenses)

📈 What Is the Tax Rate Applicable?

Income from Portugal-based crypto activity is taxed at progressive rates up to 48%, plus a solidarity surcharge of up to 5% for annual income above €80,000. There is no exemption under the NHR or IFICI regimes, unless you are operating through a permanent establishment abroad.

💸 When Are You Taxed?

When you're paid in fiat

You are taxed immediately on the value received

If you do not convert to fiat immediately and instead hold the crypto

You will be taxed later when you eventually convert it into fiat.

🚨 Important

The initial payment is always treated as self-employment income—it’s tied to your professional activity—and will be fully taxable at the time of conversion into fiat. There is no exemption or exclusion for this component.

However, any increase in the value of the crypto between the moment it was received and the moment it is converted to fiat is treated separately as a capital gain. ⚠️ This second gain may be excluded from taxation if:

You hold the crypto for more than 365 days, and
The counterparty is located in the EU, EEA, or a country/jurisdiction with a tax treaty or information exchange agreement with Portugal.

Please note

This treatment assumes separate recognition of the professional income and the appreciation. There are currently no official guidelines from the Portuguese Tax Authority or case law explicitly addressing this segmentation, so interpretations may evolve.

🔚 Shutting Down your Activity or Leaving the Country?

When you close your activity or leave Portugal, any crypto you earned as self-employment income but haven’t yet converted into fiat will now become fully taxable at that moment.

In addition, any appreciation in the value of that crypto between the time it was earned and the time it’s converted into fiat is treated as a capital gain. This gain may be excluded from taxation under the 365-day rule—although it’s still unclear whether this rule applies in the context of the exit tax, as there are currently no official guidelines from the Portuguese Tax Authority or court decisions.

Got Paid in Crypto for Something Non-Crypto?

Let’s say you’re a designer or consultant and someone pays you in crypto. That’s still taxable as professional income, based on the underlying nature of the work you provided. If it was a service, then you’re taxed as an independent worker under Category B.

What you need to do

Report the fair market value of the crypto at the moment of payment
Issue a standard invoice through the official tax platform (Portal das Finanças)

But what happens if you decide to keep that crypto instead of converting it to euros right away?

The value increase between the moment you received the crypto and when you eventually convert it into fiat will be treated as a capital gain. This gain may be excluded from taxation under the 365-day rule — but only if:

You hold the crypto for more than 365 days, and
The counterparty of the transaction is located in the EU, EEA, or a country/jurisdiction with a tax treaty or exchange of information agreement with Portugal.

So yes, the payment is taxed immediately as self-employment income — but any future appreciation may benefit from exclusion. 🙌

Getting paid in crypto and confused about how to invoice it correctly?

Let us help you get compliant and avoid issues with the tax authority.

Your Reporting Obligations 🧾

Whether your crypto activity is classified as passive or active, you’ll need to report it correctly to the Portuguese tax authorities. Here’s what you need to keep in mind:

All crypto income must be declared in your Annual Personal Income Tax return

To be filed between April and June of the following year

Regardless of whether the income is from capital gains, staking rewards, mining, or professional services.

If you're classified as a self-employed worker (Categoria B)

You’ll need to follow specific rules for invoicing, social security, and tax reporting — even when you’re paid in crypto.

Ready to Start Your Crypto Tax Journey in Portugal?

We're here to help you!

Whether you’re already managing crypto professionally, investing long-term, or just getting started, navigating the tax system in Portugal can feel overwhelming — but it doesn’t have to be.

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How We Can Help You

Get in touch with us to receive tailored guidance or choose one of our crypto tax support packages.

You don’t have to figure this all out alone. Our team’s here to guide you:

Simplify your crypto life in Portugal

Tax Consultations

Personalized session to help you legally lower your crypto tax bill.

30-minute Consultation

120

€ (+VAT if applicable)

Book Your Session Now

1-hour Consultation

200

€ (+VAT if applicable)

Book Your Session Now

Relocation Assistance

From getting your NIF to helping you apply for a visa (if you’re a non-EU citizen), we’ll support you every step of the way to make your move smooth and fully compliant.

For eu citizens

200 – 500

€ (+VAT if applicable)

For non-eu citizens

1.500 – 2.900

€ (+VAT if applicable)

Income Tax Return Support

Stay compliant, stress-free. Visit our dedicated webpage for more details on how we can help with your crypto-related IRS obligations in Portugal:

Self-Employment Obligations

Do you have a crypto activity? We’ll set you up right.

Need More Information About Crypto Taxes in Portugal?

We’ve Got You Covered!

Still have questions or need more clarity before booking your crypto consultation? No worries—we’re here to help you every step of the way! ✨

Simply fill out the form 📋, and one of our expert advisors will get back to you as soon as possible. Whether you need guidance, explanations, or just some extra details, we’re happy to provide the information you need to make the best decision with confidence.

👉 Reach out now and let’s get started! 🚀

Curious About How to Manage Your Crypto Taxes in Portugal?

We're here to help you!

Whether you’re trading actively, staking, farming, or just holding for the long term, understanding how Portugal’s tax rules apply to your crypto is key.

From figuring out if your income is passive or professional, to registering as self-employed or applying for tax benefits like the IFICI, our expert team is ready to guide you step-by-step.