Portugal: crypto holders benefit from the long-term 0%

For capital gains on the disposal of digital assets, Portuguese law distinguishes according to whether the asset was held for more or less than a reference period.

This period is more than 365 days¹. Beyond it, the gain receives its own treatment; below it, it falls under the ordinary regime for capital gains on securities.

This holding-period rule is what made Portugal's reputation among holders of digital assets, and it is indeed more favourable than the French treatment, which does not distinguish by holding period.

We do not publish the rate applicable to disposals below this period, nor the list of exceptions provided for — notably for assets treated as securities, for professional activities and for disposals to jurisdictions with a preferential tax regime: they do not appear in the extracts we have been able to verify.

These exceptions are significant and considerably narrow the regime's scope. Repeated trading activity, in particular, may be classified as a professional activity and fall under an entirely different treatment.

Three operations that everyday language confuses must be distinguished. Disposal in exchange for legal tender, which is the usual taxable event; the exchange of one digital asset for another, whose treatment differs between jurisdictions; and income from mining or validation, which falls into a separate category.

An active holder generally carries out all three, often without realising it, and their taxation cannot therefore be derived from a single rule. This is what makes local advice necessary, far more than the choice of country itself.

The regime applies only to a Portuguese tax resident. Tax residency is acquired in particular through presence of more than more than 183 days² in the year, or by having a dwelling in conditions suggesting an intention to keep it as a habitual residence.

A taxpayer who kept their household in France would remain domiciled there within the meaning of Article 4 B of the Code général des impôts, and the Portuguese regime could not be relied on against the French tax authorities.

The departure may also trigger the French exit tax, which targets securities with a total value of at least more than €800,000³ for people who have been resident for at least from 6 years⁴ out of the last ten years.

We do not publish the French tax authorities' position on whether digital assets are included in the exit tax base: it does not appear in the extracts we have been able to verify, and it must be established with an adviser before any departure.

Since Portugal is a member of the European Union, however, the payment deferral is automatic, which considerably simplifies the procedure compared with a move to a destination outside Europe.

The current incentive regime, successor to the non-habitual resident status, applies a special rate of 20%⁵ to eligible employment and business income for 10 years⁶, subject to from 5 years⁷ of prior non-residence.

It is, however, reserved for qualified roles and requires an application within a short window. It is not intended to cover purely investment income.

The ordinary scale runs from from 12.5%⁸ to 48%⁹, and dividends bear a flat withholding rate of 28%¹⁰.

Finally, a flat withholding rate of 35%¹¹ applies to income from a jurisdiction with a preferential tax regime, which directly affects certain digital asset platforms.

• The distinction by holding period is real, with a threshold of more than 365 days¹.
• It comes with exceptions, notably for professional trading activities.
• It applies only to a Portuguese tax resident, which requires an actual departure from France.
• The exit tax deferral is automatic for a move to Portugal, a member of the European Union.
• Income from a jurisdiction with a preferential tax regime bears 35%¹¹.

The automatic exchange of information is also gradually being extended to digital asset service providers, and a European framework has been adopted to that end. The practical discretion the sector long enjoyed is shrinking, and reporting compliance is becoming the main issue — even before the choice of a jurisdiction.