Bitcoins are Taxable in Portugal

As reported by CCN, Portugal’s central bank, Bank of Portugal, has in the past stated that bitcoin has no legal tender in the country, nor a central authority controlling it. The Ministry of Finance now restated that bitcoin has no legal framework, but claims that bitcoin earnings are taxable. In a statement sent to Jornal de Negócios, the AT said:

If current Portuguese tax laws don’t specifically contemplate this type of activity, we are of the opinion that such income constitutes distribution of profits, in proportion to its share (investment)

The statement came in a written answer that took two months to come. Given that bitcoin earnings constitute ‘distribution of profits’, the organization concluded that bitcoiners should declare their earnings, as long as these “by virtue of their habitual nature, constitute a professional or business activity”. To declare them, the following instructions were given:

Since these are earnings paid by an entity that doesn’t reside in Portugal, they’re considered as obtained abroad, which must be mentioned in Annex J (table 4 – field 420) [of Portugal’s tax forms]