How to Pay Zero Tax on Crypto in Portugal
The 365-day holding rule, stablecoin swaps, and the landmark AT ruling that changed everything
Key Takeaway
If you hold a crypto asset for 365 days or more before selling, you pay 0% capital gains tax in Portugal. In October 2025, the Portuguese Tax Authority (AT) confirmed that intermediate swaps to stablecoins (e.g., BTC → USDC → EUR) do not reset the holding period — making this one of the most favorable crypto tax regimes in Europe.
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Crypto Tax Structure in Portugal
Since January 1, 2023, Portugal taxes crypto assets under the Personal Income Tax Code (Código do IRS), as introduced by the 2023 State Budget (Lei n.º 24-D/2022). The definition of a crypto asset follows the EU MiCA Regulation: "any digital representation of value or rights that can be transferred or stored electronically using distributed ledger technology." NFTs (unique, non-fungible tokens) are explicitly excluded.
Business Income
Mining, transaction validation
IRS progressive scale
Capital Income
Staking, delegation rewards
Flat rate (or englobamento)
Capital Gains
Sale of crypto assets
Depends on holding period
Category G (capital gains) is the most relevant for investors, as it provides the path to full tax exemption. The rest of this article focuses on this category.
The 365-Day Rule: Full Tax Exemption
The key provision is found in Article 10(19) of the Código do IRS:
"Ficam excluídos de tributação os ganhos obtidos, bem como as perdas apuradas, resultantes de operações previstas na alínea k) do n.º 1, respeitantes a criptoativos detidos por um período igual ou superior a 365 dias."
"Gains obtained, as well as losses incurred, from operations referred to in paragraph k) of section 1, relating to crypto assets held for a period equal to or greater than 365 days, are excluded from taxation."
Holding Period Timeline
Transitional rule: For crypto assets acquired before January 1, 2023, the holding period is counted from the actual date of acquisition, not from when the law took effect (Art. 220, Lei n.º 24-D/2022).
Crypto-to-Crypto Swaps: Deferred Taxation
Article 10(20) of the Código do IRS establishes that when a crypto asset held for less than 365 days is exchanged for another crypto asset (not fiat), taxation is deferred: no tax is due at the moment of the swap, and the acquisition cost of the original asset carries over to the new one.
Two Core Principles
Holding ≥ 365 days → full tax exemption (Art. 10(19))
Crypto-to-crypto swap (held < 365 days) → deferred until fiat conversion (Art. 10(20))
The unresolved question (until October 2025): What happens when an investor who held crypto for 365+ days cannot sell directly for EUR and must first swap to a stablecoin (USDC, USDT)? Does this intermediate swap reset the holding period?
AT Ruling: Informação Vinculativa n.º 28969
Issued by Autoridade Tributária e Aduaneira (Portuguese Tax Authority)
The Case
A Portuguese tax resident acquired a crypto asset (e.g., BTC), held it for more than 365 days, then executed a two-step operation:
No direct BTC/EUR trading pair available on the exchange
The AT's Position
The intermediate stablecoin conversion, when it is immediate and technical in nature and serves solely to facilitate the subsequent conversion to EUR, qualifies as a "technical conversion" (conversão técnica) without independent tax significance. The taxable event occurs only at the moment of final conversion to fiat (EUR). If the original crypto asset was held for ≥ 365 days, the capital gain is exempt from tax.
Practical Example
| Day | Operation | Tax Result |
|---|---|---|
| Day 0 | Purchase BTC | 365-day clock starts |
| Day 400 | Swap BTC → USDC | Not taxable |
| Day 400–401 | Convert USDC → EUR | 0% — exempt |
Two Approaches: Professional Debate
The AT ruling was met with mixed reactions in the professional community. Leading Portuguese tax lawyers and specialized legal practices published their analyses, and two distinct approaches have emerged.
AT's Approach: "Technical Conversion"
The Tax Authority treats the entire chain BTC → USDC → EUR as a single economic event. The intermediate stablecoin swap has no independent tax significance — it is merely a technical link necessitated by exchange infrastructure limitations (no direct EUR pair). The taxable moment is only the final fiat conversion.
Strict Legal Reading
Recognized tax lawyers note that the concept of "technical conversion" has no direct basis in the Código do IRS. A stablecoin is a legally independent crypto asset, and exchanging one crypto asset for another constitutes a disposal (alienação onerosa). Under strict reading, the operation splits into two separate events:
BTC → USDC: Disposal of a crypto asset held 365+ days → fully exempt under Art. 10(19). USDC acquires a new cost basis at market value; holding period resets to zero.
USDC → EUR: Separate disposal of a crypto asset held < 365 days, formally taxable. However, in practice it generates a minimal loss (stablecoins don't maintain perfect parity, plus exchange fees). This loss can be carried forward for 5 years under Art. 55(1)(d) CIRS.
Risks & Uncertainties of the AT Approach
Undefined "immediacy"
The AT does not specify what time interval between crypto→stablecoin and stablecoin→EUR is acceptable. Minutes? Hours? Days?
No legal basis for "technical conversion"
The distinction between "technical" and "non-technical" conversion is a category that does not exist in the law.
Burden of proof on taxpayer
The investor must prove the swap was technical in nature, not a separate investment operation.
Limited binding force
The PIV binds the Tax Authority only with respect to the specific applicant and situation. Other taxpayers cannot automatically rely on it as precedent.
Side-by-Side Comparison
| Parameter | AT Approach (PIV 28969) | Strict Legal Reading |
|---|---|---|
| Crypto → Stablecoin | "Technical conversion," not taxed | Exempt operation (held 365+ days) |
| Stablecoin holding period | Not considered (legal fiction) | Starts from zero |
| Stablecoin → EUR | Only taxable event, exempt | Separate operation → minimal loss |
| Final tax (365+ days) | 0% | 0% + loss carryforward |
| Legal reliability | Pragmatic, no direct legal basis | Based on literal reading of CIRS |
| Additional benefit | None | 5-year loss carryforward |
Professional Consensus
Despite the disagreement on legal reasoning, all participants in the professional debate reach the same practical conclusion: when a crypto asset is held for 365+ days, the investor pays no capital gains tax — regardless of which interpretive approach is applied. The difference is only in legal technique: the AT merges the operation into one event, while the strict reading splits it into two, where the first is exempt and the second generates a loss rather than a gain.
Moreover, several experts note that the strict legal reading is actually more favorable for the taxpayer, as it allows recording a small loss from the stablecoin sale that can be used to offset future taxable crypto gains.
Conditions for Zero Tax Rate
Holding period ≥ 365 days
The crypto asset must be held for at least 365 days from the date of acquisition. The holding period is calculated using the FIFO method (First In, First Out) — Art. 43(6)(g) and 43(7) CIRS.
Counterparty residency
The exemption applies only to income from operations between residents of the EU, EEA, or a state with which Portugal has a Double Tax Treaty (DTT) or tax information exchange agreement — Art. 10(21) CIRS. In practice, the exchange must be registered in one of these jurisdictions.
Documentary evidence
The taxpayer must be able to prove: date and cost of acquisition, wallet addresses and transaction IDs, continuous holding for ≥ 365 days, and (for stablecoin swaps) the immediate and technical nature of the operation — timestamps, exchange records, order logs.
Tax declaration
Even exempt income must be declared in Anexo G1 (Appendix G1) of the annual IRS declaration (Modelo 3). Since 2024, crypto assets are also subject to mandatory reporting regardless of whether any operations took place (Lei n.º 82/2023).
Tax Summary Table
| Scenario | Tax Rate |
|---|---|
| Sell crypto for EUR, held ≥ 365 days | 0% |
| Sell crypto for EUR, held < 365 days | 28% |
| Crypto → stablecoin → EUR, held ≥ 365 days | 0% |
| Crypto-to-crypto swap, held < 365 days | Deferred |
| Staking rewards | 28% |
| Mining (business income) | Progressive |
| Crypto received as payment for services | Progressive |
Practical Recommendations
Keep detailed records of all crypto operations — acquisition dates, amounts, wallet addresses, blockchain transaction IDs. This is critical for proving the holding period.
Use exchanges registered in the EU/EEA or in countries with a DTT with Portugal.
When an intermediate stablecoin swap is necessary, execute it immediately and document the technical nature. The time gap between crypto→stablecoin and stablecoin→EUR should be minimal. Save screenshots, order logs, and timestamps.
Declare all crypto operations annually in the IRS declaration (Modelo 3), even if income is exempt. Exempt income goes in Anexo G1.
For significant amounts, consider requesting an individual binding ruling (Informação Vinculativa) from the AT for your specific situation. This provides maximum legal protection.
Official Sources
Código do IRS — Article 10, paragraphs 17–22
Portuguese Personal Income Tax Code — crypto asset provisions
Lei n.º 24-D/2022 — State Budget 2023
Article 220 — transitional regime for crypto assets acquired before 2023
Informação Vinculativa n.º 28969 (October 31, 2025)
Binding ruling by Autoridade Tributária e Aduaneira on stablecoin swaps
AT — "Criptoativos" informational brochure
Official tax authority guide on crypto asset taxation
Lei n.º 82/2023 — Mandatory crypto asset reporting
Reporting obligations for crypto assets from 2024
This article is for informational purposes only and does not constitute legal or tax advice. For decisions related to crypto asset taxation, consult a qualified tax advisor or contact the Autoridade Tributária e Aduaneira directly.
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