Portugal: Laws Related to Token Sales, Blockchain, and Digital Proof

The countries of the European Union hold a patchwork of individual attitudes towards cryptocurrency regulation, but all of them also fall under the jurisdiction of the EU Commission. For EU regulations, please visit EU Laws Related to Token Sales, Blockchain, and Digital Proof.

Payment regulations

In May 2018, the Portuguese Parliament debated cryptocurrency payment regulations, with the aim of adopting a new legal framework for cryptocurrency payment services, while guaranteeing the safety of users through these services.

The local newscast Jornal de Negócios said the applicable sanctions and the issuance of digital currencies, presumably initial offers of coins (ICOs) will also be discussed. According to reports, the government will analyze cryptocurrencies so that new payment services can emerge in the market, while ensuring that users can choose between safe and profitable options.

According to the Portuguese government, the regulations will allow services related to cryptocurrencies to expand within the country, which will benefit consumers by promoting competition, while guaranteeing security and transparency in “the issuance of cryptocurrencies.”

According to an article on steemit: “The regulation of certain aspects, not yet regulated, will allow the expansion of new types of payment services, contributing to a legal framework to accommodate innovation, for the benefit of consumers, and even promote competition.”

The regulatory framework is configured to apply “new rules for accessing payment accounts” in order to avoid unjustified setbacks and ensure that payments are secure. It will also introduce rules on operational risk management, while offering “reporting mechanisms” to service providers and ICO operators.

The government will discuss cryptocurrencies so that new payment services can appear on the market while providing users with the choice between safe and viable options.

The regulations, expected later this year, will allow cryptocurrency-related services to develop within the country, which will benefit consumers by promoting competition, while ensuring safety and transparency in “the issuance of cryptocurrencies.”

Tax regulations

Given Portugal’s legal blockchain uncertainty, the PTA Portugal’s Tax and Customs Authority, or Autoridade Tributária e Aduaneira (ATA) recently issued a binding tax ruling (in Portuguese) addressing the VAT liability of a token in the context of an initial coin offering.

As tokens can be used for several purposes, VAT implications of a single token may vary based on its characteristics, functionalities, and final use. Furthermore, VAT implications of virtual products as electronic goods and services are still somewhat unestablished, leaving room for interpretation. In May 2018, the PTA concluded that, in principle, transactions containing a token may be considered an onerous transfer of goods and, thus, prima facie liable to VAT. Notwithstanding, the Tax Authority confirmed that the transfer of tokens may be exempt from VAT under the exemption foreseen for transactions concerning currency, banknotes, and coins used as legal tender. Furthermore, it was established that the VAT exemption only applies if the transfer of tokens consists merely in an alternative form of payment. In other words, attention needs to be paid to the characteristics and functions of the token in question, which typically requires a case-by-case analysis. Lastly, the PTA considered that the VAT exemption may also apply in other EU Member States since VAT is a harmonized system.

European Union

The European Parliament saw that the majority agreed to demand stricter regulation of cryptocurrencies, since an agreement with the European Council proposing closer cryptocurrency rules to avoid their abuse in money laundering and financing of the cryptocurrency. terrorism found support from Parliament.

The Blockchain partnership declaration was launched at the Digital Day 2018 on April 10, 2018, and was signed by twenty-two Member States: Austria, Belgium, Bulgaria, Czech Republic, Estonia, Finland, France, Germany, Ireland, Latvia, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, UK.


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