Canada Adopts International Crypto Tax Reporting Standard
Canada is aimed at having the OECD standard for crypto asset tax reporting in place by 2027, as agreed with 46 countries.
While traders and investors have seen Portugal as a crypto-friendly region for payments and tax, the country’s government has proposed a massive 28% tax on all capital gains from cryptocurrencies held for less than twelve months. The State Budget has also proposed a 4% taxation fee for free transfers of cryptocurrencies – such as if a user has received cryptocurrency as part of an inheritance.
There has been a section added to the State Budget for 2023, noting that cryptocurrencies will be treated with a “broad and adequate” framework in order to put taxation law in place for the digital assets industry. Previously, cryptocurrencies had not been addressed in the annual State Budget because they were not seen as legal tender.
According to the budget, cryptocurrency gains will be taxed. The gains can come in from cryptocurrency activity such as trading, mining, and payments taken as cryptocurrencies. According to the document:
“Capital gains relating to crypto-assets held for a period of less than one year are subject to the rate of 28% (without prejudice to the aggregation option), with the capital gains referring to crypto assets held for more than 365 days exempt from taxation.”
Legalities in cryptocurrency in Portugal
The section of the State Budget also notes that the proposed tax regime will help encourage security and legal certainty. According to the government document, this comes with the intention to encourage the growth and development of the cryptocurrency industry aligned with the traditional economic system.
At the end of the day, the parliament in Portugal will need to sign off on the proposed cryptocurrency tax laws. If the deny the proposition, the changes will not be enforced. However, earlier this year in March, António Mendonça Mendes – the country’s Secretary of State – stated the reason behind the taxation of capital gains that investors and traders were earning through cryptocurrency.
This wouldn’t be the first European country to take this approach to taxing cryptocurrencies. In May, Germany released a document that defined income tax legislation for cryptocurrencies.