Knowledge

On the 10th of October the Portuguese Government published its draft 2023 budget proposal.

On the private client side, the key highlight is the introduction of a completely new framework in what relates to crypto assets. Due to the operation of a particular feature of the Portuguese legislation, up until now the disposal of crypto assets was largely out of scope of Portuguese Income Tax, also not being subject to the current stamp duty rules. If the proposed legislation becomes law, as we believe will be the case, Portugal will have a clear and very complete framework for the taxation of crypto, whilst still retaining, at least for now, an exemption in what relates to long term capital gains on crypto assets that are not classed as a security.

It is important to note that the new proposed framework contains new rules also on reporting and tax collection obligations of crypto asset providers, even where these entities are not resident in Portugal.

No changes have been proposed to the longstanding, and well-known, NHR regime.

On the corporate side, the Government has proposed the introduction of some important changes to the deductibility of losses, whilst also increasing certain tax incentives for the capitalization of companies. A new “super deduction” for corporate tax purposes was introduced to benefit companies that increase the base salaries of their long-term employees within the scope of a collective bargaining arrangement.

Below, you will see a short document which aims to provide you with the highlights of these proposed new rules.