Frequently Asked Questions

Answers to the most common questions about crypto taxation, residency, and IRS reporting in Portugal.

Yes, crypto is taxed, but selectively. Portugal is no longer fully tax-free (that changed in 2023), but it remains one of Europe’s more favorable jurisdictions, especially for long-term holders. Short-term capital gains are taxed, while long-term ones are often exempt.

  • Short-term (assets held < 365 days before disposal/sale): Flat 28% on gains.
  • Long-term (held > 365 days): Generally tax-free (0%) for most individual investors, with some exceptions (e.g., if classified as securities-like tokens or certain other cases).

Gains from crypto assets held beyond 365 days are tax-free. However, losses are disregarded. The 365-day tax exemption period pertains “exclusively to capital gains” and does not extend to other forms of cryptocurrency gains. Capital gains refer to the scenario where an individual purchases a cryptocurrency asset using FIAT currency and subsequently sells it at a profit. Additionally, it is conceivable that an individual may acquire cryptocurrency in exchange for services rendered, in which case such income must be declared upon receipt. In such instances, the commencement of the capital gains period is initiated from the moment the cryptocurrency is received.

In the case of crypto assets acquired prior to 1 January 2023, the 365-day rule works retroactively.

No taxation arises on crypto assets held for less than 365 days whose consideration on a transfer is also crypto assets, meaning you have not sold for FIAT currency.

There are 3 ways to look at the 365-day-rule set by the government.

1) The government only takes into consideration the transaction from FIAT to crypto asset and from crypto asset to FIAT.

This means that you can consider 365 days between these transfers as tax free, if you can prove that all trades are connected to the initial FIAT to crypto asset transfer.

Example: On 01-01-2024 you deposit €10.000,- in an exchange. During the year, you hold multiple positions for months at the time and eventually you end up with €100.000,- of crypto assets, which you sell on 01-01-2025. As the government does not look at crypto-to-crypto, this could be considered 365 holding period in crypto.

2) The second way to look at it is to keep the last traded crypto asset 365 days.

Preferable you would not like to hold a volatile asset for 365 days and therefore stablecoins are created. The government does recognize stablecoins as a different asset, but not for tax purposes as of 2024.

Example: On 01-01-2024 you buy €10.000,- Bitcoin. On 01-03-2024 you sell your Bitcoin for a stablecoin. You hold this stablecoin until 01-03-2025. In this case you held a certain crypto asset for 365 days. What is debateable is that the crypto asset which made the capital gains, was not held 365 days.

3) The third way and most secure way, is to hold the crypto asset where you made the profit, 365 days.

This way you were in crypto 365 days and you held the crypto asset where you made the capital gains, 365 days.

Example: On 01-01-2024 you buy €10.000,- Bitcoin. On the 31-12-2024 you sell your Bitcoin for €100.000,-.

Common ones include:

  • •Selling crypto for fiat (e.g., EUR).
  • •Using crypto to buy goods/services (treated as disposal).
  • •Using crypto debit cards to spend your crypto
  • •Donations and gifts that you transfer to a third party

You do not have to hold the crypto assets 365 days in Portugal or 365 days in a specific location on an exchange or wallet. So yes the 365-day rule works retroactively and is already counting before you move your residency to Portugal.

No, crypto-to-crypto swaps, including those to stablecoins, do not trigger a taxable event or reset the holding period—provided the counterparty is in the EU/EEA or a jurisdiction with a tax treaty or information exchange agreement with Portugal. A recent AT binding ruling (Processo No. 28969/2025, issued around October 2025) confirms that such swaps (e.g., to USD-pegged stablecoins) preserve the original acquisition cost and holding duration under FIFO, allowing the exemption to carry over to the new asset.

Capital losses from assets held for more than 365 days are not tax-deductible. You can only use short-term losses (from assets held less than 365 days) to offset short-term capital gains (which are taxable). These short-term losses can be carried forward to offset taxable short-term gains in the next 5 tax years.

Important note: To carry forward losses for future use, you must declare (englobamento) them together with your other income in your annual tax return, even if you had no taxable gains in that year.

No, the 365-day rule does not apply for crypto assets held in a Portuguese company like a limitada. If the crypto are held within a company IRC (corporate taxes) will apply on the realised capital gains of the crypto assets.

Passive crypto income (e.g., staking rewards, lending interest, or yield farming returns) received in the form of cryptoassets is not taxed at the time of receipt. Instead, taxation is deferred until the onerous alienation of those received cryptoassets, such as when they are sold for fiat currency, exchanged for other assets, or used to acquire goods/services. The holding period for the received cryptoassets begins at the time of receipt.

The AT distinguishes between receiving rewards in fiat (immediate tax) vs. receiving rewards in-kind (tax deferred until disposal). This means that for income tax purposes, there is no distinction.

Airdrops are taxed based on what activity you provided to obtain the airdrop.

  • •Work-related (Cat B): Receiving an allocation because you work(ed) for a protocol → taxed as dependent or independent income. Taxed upon receiving
  • •Activity-based (Cat B): Testnets / participation → taxed as income with a 15% coefficient. Taxed upon selling to fiat.
  • •Capital at risk (Cat E): Receiving an airdrop for liquidity providing → 28% passive tax or 0% if held longer than 365 days. Taxed upon selling to fiat.
  • •NFT or fork airdrops: May trigger stamp duty. Taxed with 10%. Stamp duty is not part of income taxes.

AT´s binding opinion “29052” gave more clarity in what they qualify as a “full-time crypto trader”. Gains from the sale of cryptoassets held for 365 days or more are excluded from taxation, provided they are not classified as professional or business income.

The “Professional Activity” Test: To remain under the tax-free “Category G” (Capital Gains), the activity must not be a professional habit.

AT evaluates this based on:

  • •Habitualness: Frequency and regularity of trades.
  • •Intent: The intention to generate non-fortuitous income.
  • •Economic Weight: How significant the activity is to your overall finances.

No, crypto payments are taxed at the moment you receive the payment, just as fiat payments. You are taxed on the equivalent value in fiat.

Non-fungible and unique crypto assets (NFTs) are explicitly excluded from the definition of “crypto assets” under the 2023 legislation for many tax purposes. This means that any capital gains that are arising from buying and selling NFT´s are not reported and not taxed.

Binding ruling (Processo 28298/2025) from the Portuguese Tax Authority (AT) explains how future trading is taxed. AT has clarified that profits from crypto futures trading are classified as Financial Derivatives under Article 10, no. 1, paragraph e) of the IRS Code.

Even though the underlying asset is a cryptocurrency, a futures contract is a standardized financial instrument. This distinguishes it from the simple sale of crypto-assets (which falls under paragraph k). The IRS declaration Modelo 3 clearly states: “Criptoativos que não Constituam Valores Mobiliários”, meaning that the 365-day rule only counts for crypto assets that are not considered securities. The profits of these futures are always taxed, but only once realised, meaning sold for fiat or spent.

With NHR regime and NHR 2.0, you can obtain passive income from abroad tax free in Portugal. This means that if you receive, staking rewards, yields or any other passive income from abroad, it is considered tax free in Portugal.

Using your crypto as collateral to open a loan is generally not a taxable event in Portugal, since you are not selling your assets. You’re only receiving funds that must eventually be repaid. However, when you repay the loan using your crypto, the assets used to settle the debt are considered transferred to a third party. At that point, it becomes a taxable event. The gain can be tax-free if those assets were held for at least 365 days before being used for repayment.

Dividends paid in crypto are taxed the same way as fiat dividend payments. The dividend in crypto are taxed at the moment that you receive the payment, not when you sell them for fiat.

If you are giving your crypto to a third party, then you realise your capital gains. So if you think about gifting your spouse crypto assets, make sure you include it as realised capital gains in your tax return.

In Portugal, gifts between “direct family” (parents, children, spouses) are generally exempt from Stamp Duty, but a 10% tax can apply for others.

Portugal does not have a wealth tax and therefore you do not have to report your crypto holdings, but rather your capital gains.

Report gains in the appropriate annex of your annual IRS declaration (filed April–June for the prior year):

  • •Annex G1: For exempt long-term capital gains (held >365 days). Include acquisition/sale details, but no tax is due.
  • •Annex G: For taxable short-term capital gains (held <365 days), taxed at a flat 28%. Use this for Portuguese-sourced or general gains.
  • •Annex J: If gains are from foreign sources (e.g., non-EU exchanges) and don't qualify for exemption, or for certain professional activities.

When declaring crypto capital gains in category G or G1, you must include the following six details:

  1. 1.Date the asset was sold (converted to fiat)
  2. 2.Fiat amount received from the sale
  3. 3.Counterparty country of the sale
  4. 4.Date the asset was originally purchased
  5. 5.Fiat amount paid at the time of purchase
  6. 6.Counterparty country of the purchase

Report gains in the appropriate annex of your annual IRS declaration (filed April–June for the prior year): Annex G1: For exempt long-term capital gains (held >365 days). Include acquisition/sale details, but no tax is due. Annex G: For taxable short-term capital gains (held <365 days), taxed at a flat 28%. Use this for Portuguese-sourced or general gains. Annex J: If gains are from foreign sources (e.g., non-EU exchanges) and don’t qualify for exemption, or for certain professional activities.

It is not possible to add manual attachments like screenshots or Excel spreadsheets to the tax return. You are only expected to share your screenshots when an audit (Divergência) is requested.

Income from tax heavens might increase your taxes from 0% to 35%. This is the rule for traditional incomes such as capital gains, dividends, interest, royalties and rental income. Although the Portuguese authorities haven´t confirmed that this counts for crypto too, we still suggest that you avoid the risk

FiFo, First-in-First-out is a calculation mechanism to calculate the capital gains, just as in supermarkets the oldest products (First-in) are in the front, while the newer products are in the back. In Portugal FiFo is specifically institution based as the law states the following:

“Consideram-se vendidos os criptoativos adquiridos há mais tempo (FIFO – First in First Out). No caso dos criptoativos estarem depositados em mais do que uma instituição financeira ou prestador de serviços, aplica-se a regra do FiFo a cada uma, individualmente.”

This means there is no definate answer regarding how to apply FiFo to DeFi or cold storage.

You only report exit taxes on your crypto assets when exiting the EU. If you move within the European Union, you dont need to report exit taxes on your crypto assets. When you cease tax residency in Portugal, the change is treated as a deemed disposal (sale) of your crypto assets at their current market value.

This triggers the realization of any unrealized capital gains accrued during your residency. The standard capital gains rules then apply:

  • •Gains on assets held for more than 365 days are generally tax-free.
  • •Gains on assets held for less than 365 days are taxed at 28%.

You typically have 15 working days to respond to a tax audit (divergencia).

To strengthen your submission: Provide transaction records, screenshots, and a clear explanation letter that:

  1. 1.Links the evidence to your declared purchases/sales.
  2. 2.Explains the reported figures in simple, non-technical language.
  3. 3.For Category B income (services/business), details how you earned the crypto.

Submission (do both for safety and proof):

Online:

  • •Upload via the “Divergência” section on Portal das Finanças.
  • •Also submit through “E-balcão” (the tax authority’s online helpdesk).

In person:

  • •Bring three printed copies to the Finanças office.
  • •Leave two copies and get the third stamped/signed as your receipt.

After submission: The authorities will review your documents. If everything is complete and well-explained, the audit is usually approved without problems. If needed, you may be called for a follow-up meeting. Transparency and good organization generally make the process straightforward and manageable.

Revolut opened a Portuguese branch, which means that Revolut offers Portuguese bank account. Revolut also offer custodial serviçes meaning that you can hold crypto assets on Revolut. Our clients have also had positive experience with MilleniumBCP.