Portugal: tax changes in 2023 due to the approval of the General State Budget

Law 24-D/2022 of 30 December approves the State Budget for 2023, with specific amendments to the Personal Income Tax Code (Código do IRS) and Corporate Income Tax.

In this information note we briefly describe the relevant changes for individuals in the Global Mobility field.

Non-Habitual Resident Regime

There are no changes to the special tax regime for individuals moving to Portugal. Thus, and always with due analysis for specific cases, Portugal continues to maintain the same advantages of a fixed rate of 20% for the taxation of income generated in Portugal and the exemption of all income generated outside the territory as long as there is a double taxation treaty and the income is not generated in a State considered as a tax haven.

Amendments on crypto-assets

A definition of cryptoassets is established as any digital representation of value or rights that can be transferred or stored electronically using a distributed repository or similar technology. This definition expressly excludes, for tax purposes, single cryptoassets that are not fungible with other cryptoassets.

Transactions derived from the issuance and mining of crypto-assets are included as commercial or industrial income.

The sale of cryptoassets is taxed as capital gains, provided that the holding period is less than 365 days, while capital gains are exempt if the sale takes place with a holding period of more than 365 days (including holdings prior to 1 January 2023). It should be noted that, in order for the exemption to apply, the parties must be residents of states within the European Union or have signed the respective double taxation agreement with Portugal.

It also establishes the obligation for persons who administer and manage cryptoassets on behalf of a third party to inform the Tax Authority of the operations and taxable persons carried out with their intervention.

For the determination of the taxable base, only the 15% portion of the income will be considered in the case of the sale and 95% in the case of the mining of cryptoassets.

Donations of cryptoassets: 10% of the taxable base is established at the rate of Stamp Duty (Impuesto sobre Actos Jurídicos Documentados).

Other changes to the IRS

The special taxation of 28% for non-residents in cases of taxation on capital gains derived from the sale of real estate is eliminated. They are now taxed under the general regime of 50% in accordance with the proportional tables established for this purpose.

Updating of the tax bases for individuals under the general income tax regime (residents). In general, they have been increased by 5.1% and a new tax bracket of 21% has been created.