Portugal was once the undisputed crypto tax haven in Europe, but that changed significantly with the 2023 State Budget. If you’re considering a move to Portugal for crypto-related tax reasons, here’s what you need to know about the current rules.
Last updated: March 2026. Tax laws change frequently — consult a qualified tax advisor before making any decisions based on this article.
Current Crypto Tax Rules in Portugal (2023 Onwards)
Since January 1, 2023, Portugal has a dedicated tax regime for crypto assets. The key rules for individuals are:
- Short-term capital gains (held less than 365 days): Taxed at a flat rate of 28% under Category G (capital gains). This applies when you sell crypto for fiat currency (euros, dollars, etc.).
- Long-term capital gains (held 365 days or more): Tax-free for individuals. This is the big advantage that still makes Portugal attractive for crypto investors who take a buy-and-hold approach.
- Crypto-to-crypto trades: Not taxable. Swapping one cryptocurrency for another does not trigger a taxable event.
- NFTs: Non-fungible crypto assets are expressly excluded from the crypto tax regime and are not taxable.
- Staking and lending income: Taxed at 28% as Category E income (capital yields).
- Mining: Casual mining may fall under Category E at 28%. Large-scale mining operations that resemble a business are taxed under Category B (self-employment) at progressive rates ranging from 14.5% to 53%.
- Professional trading: If your crypto trading activity is frequent enough to be considered a professional or business activity, it falls under Category B and is subject to progressive income tax rates (14.5% to 53%) rather than the flat 28% rate.
Important Caveats
- Security-type tokens: Tokens classified as security-type instruments do not qualify for the long-term capital gains exemption.
- Blacklisted jurisdictions: The tax-free long-term holding rule does not apply if your crypto is held in an exchange or wallet located in a jurisdiction on Portugal’s official tax haven blacklist. Income from blacklisted jurisdictions may be taxed at 35%.
- Reporting requirements: Since 2024, all individuals must report their crypto transactions and gains in their annual IRS (Modelo 3) tax return, even when gains are long-term and exempt from tax.
- Corporate entities: The above rules apply to individuals only. If you hold crypto through a Portuguese company, all gains are taxed as corporate income regardless of holding period.
The NHR Regime Has Ended — IFICI (NHR 2.0) Is the Replacement
Portugal’s popular Non-Habitual Resident (NHR) tax regime officially ended on January 1, 2025. It has been replaced by the IFICI (Tax Incentive for Scientific Research and Innovation), sometimes called NHR 2.0.
The IFICI regime is narrower than the old NHR. It is designed to attract highly qualified professionals working in scientific research and innovation, rather than the broad range of retirees and remote workers who benefited from the old NHR. Under IFICI, qualifying employment and self-employment income is taxed at a flat 20%, and most foreign-source income is exempt from Portuguese tax (except pensions and income from blacklisted jurisdictions).
If you were already registered under the old NHR scheme before its end date, you can continue to benefit from it for the remainder of your 10-year period. However, new applicants can no longer access the NHR — they must qualify under IFICI’s stricter eligibility criteria instead.
Why Portugal Is Still Attractive for Crypto Investors
Despite the 2023 changes, Portugal remains one of the most favorable countries in Europe for crypto investors, mainly because:
- Long-term holders (365+ days) pay zero tax on gains
- Crypto-to-crypto swaps are not taxable events
- NFTs are expressly excluded from the tax regime
- There is no wealth tax on crypto holdings
- The 28% rate for short-term gains is competitive compared to many European countries
The key takeaway is that Portugal has moved from being a completely tax-free jurisdiction for crypto to one that rewards long-term holding. If you’re a long-term investor rather than an active trader, Portugal is still an excellent option.
Historical Background: The 2016-2022 Tax-Free Era
For a historical perspective, here’s the information on the previous situation which led to crypto gains for Portuguese residents being entirely tax-free:
In a 2016 official ruling, the Portuguese Tax Authority analyzed the possible classification of cryptocurrencies within certain types of income that are subject to Portuguese tax, notably capital gains, capital income and income from business activities, and decided that, as a general rule, natural persons should not be taxed in respect of gains derived from the valuation or sale of cryptocurrencies, except that, in the case of sale of cryptocurrencies, if they correspond to the individual’s main recurrent activity, income obtained from such activity could be subject to Portuguese tax. It should also be noted that this was only a partial decision that did not elaborate on other types of income derived from other cryptocurrency-related activities (e.g. mining and farming activities).
Have a look at the 2016 binding information as it’s the most relevant document for crypto investors. The linked document is in Portuguese, but it consists of the Portuguese tax authority’s reply to a direct question about crypto taxation.
I’ll provide a basic interpretation (in my own words, not a word-for-word translation) for those of you who don’t understand Portuguese:
Cryptocurrencies or virtual currencies are not technically considered money due to not having legal tender in Portugal. However, they can be exchanged, with a resulting profit, for real currencies (euros, dollars, or other) at exchanges, with the prices being determined by the demand for said cryptocurrency.
Thus, cryptocurrencies can generate different types of taxable income:
- Gains obtained from the purchase and sale of virtual currency units/exchange from the cryptocurrency to real currency (whatever it may be)
- For obtaining commissions for the provision of services related to obtaining cryptocurrency.
- For gains derived from sales of products or services in cryptocurrency
This document only considers the first scenario. This is the scenario faced by most crypto investors.
The profits from this activity are candidates for three categories of income types:
- Capital Gains – category G (e.g. sale of an apartment, sale of shares)
- Capital Yields – category E (e.g. rent of an apartment, dividends)
- Professional Income – category B (e.g. consultancy, freelance work)
Category G
Article 10 of the IRS Code specifies the cases that are taxable as capital gains. The key thing to note here is that when the legislator created this law, they resorted to a closed type, meaning that the law is specifically for the items mentioned and nothing else. Since cryptocurrencies do not fall within the specific cases mentioned, and their value is merely determined by supply and demand, therefore we can conclude that they are not taxable within this category.
Category E
This category clearly does not apply to the sale of crypto assets since it relates to yields on capital e.g. dividends, rental income. On the other hand, I would note that the income derived from services such as YouHodler and other crypto interest accounts would probably fall in this category. The same goes for income from crypto staking e.g. Ethereum staking.
Category B
Here’s the tricky one. Category B relates to the income of a self-employed worker. When a type of income can be classified as of category B or any of the other two categories considered here, category B would prevail. So in this category income can be taxed whether it comes from sales, whether it is capital income, or any other nature, pursuant to paragraph 1 of article 3 of the IRS Code.
To determine whether the income falls into this category, one would need to consider its frequency and the orientation of the activity towards obtaining profits. If the existence of the exercise of a business or professional activity is verified, then the taxpayer is obliged to comply with the declarative obligations contained in paragraph 6 of article 3 of the Code of IRS, i.e. to issue an invoice or equivalent document (electronic invoice-receipt), whenever you sell some product or provide a service.
The reason I say that it’s a tricky one is that crypto traders need to consider carefully whether their activities would be considered professional income or not. Here I would suggest that if you’re in doubt you should consult a tax lawyer. The general rule worldwide is that if trading is your main source of income and you are opening and closing positions on a daily basis you would most likely classify as a professional trader and your income will fall in this category – therefore not being tax-free.
The conclusion of the document states clearly that the sale of cryptocurrencies is not taxable in Portugal unless due to its frequency it constitutes a professional or entrepreneurial activity, which would make it taxable under category B.
This latter point also results in a lot of questions about whether or not one would be classified as a professional trader.
There are several factors that determine whether one’s trading activity is professional or not. These include:
- Number of trades per day/week/month/year.
- Holding period of financial products
- Complexity of traded financial products
- Number of trading platforms used
- Debt-to-equity ratio, credit financing
- Profit level and relationship to other income
- Additional relevant trading activities (such as advice)
- Traders’ main activity (where else do you get your money from?)
The fact that one of the factors listed above applies to you does not automatically make you a professional trader. Ultimately one must look at every individual’s overall situation, and this can only be reliably done by involving a tax lawyer who will give you a written opinion.
Note: The analysis above was how crypto was treated before 2023. Since the 2023 State Budget, crypto assets now fall explicitly under Category G (capital gains) with specific rules, making this historical analysis less relevant for current tax planning. It remains useful for understanding how Portugal arrived at its current framework.
Contact me if you need to speak to a tax lawyer who knows how to deal with crypto. It’s very important that you assess your individual case before making any decisions.
