How to cash out crypto tax free in Portugal?

I am citizen of an EU country. I have crypto which I want to exchange into fiat, and I don’t want to pay taxes in my own country. As Portugal is the most friendly country with crypto, I would like to know what I have to do in order to be able to legally withdraw my funds into fiat money in a Portuguese bank and avoid taxes on crypto in this way. So, what I do need for that? Residence is enough or do I need citizenship?

John,
I have heard that Portugal does not tax crypto profits but I don’t know if that is true.
It seems odd that they would not as this could create a big tax loophole. If you have enough income to justify changing citizenship then it seems it would be wise to seek professional guidance on this matter.

I think it’s pretty straightforward. I hold crypto too but have never sold any. However, friends of mine in Lisbon simply convert their crypto into Euros and transfer it to their Portuguese bank account. If/when the bank asks for the source of funds, these friends present them with the transaction receipt from the exchange (E.g Coinbase, Binance) and so far they haven’t had any issues. These friends have used the funds to buy real estate. Hope this helps.

Are they Portuguese citizens? Otherwise what are the conditions to open a bank account in Portugal if you are an EU citizen who doesn’t have residence in Portugal?

You are able to open a bank account with a NIF (tax number) as a non-resident. I hold a bank account in Portugal and am not a Portuguese citizen nor a resident. You will be required to provide a CV, source of income, employment details, purpose of holding the account (e.g. for GV, property, investment etc.). As you’re an EU citizen, I don’t see why you’ll encounter any problems.

The ones I was referencing are both Portuguese and non-Portuguese. You can open a bank account in Portugal as a non-resident. You’ll need a non-resident NIF (tax ID number) for that…but if you’re not resident in Portugal then I believe you would be liable for crypto gains wherever you do live.

So, in short, in order to NOT pay taxes on my crypto, I should be a resident or a citizen of Portugal?

You are not liable for taxes in Portugal, but taxable where ever you are currently a tax-resident.

If you have tax residency in Portugal

  1. If you just hold crypto. For example if you bought bitcoin for 5000-10000 dollars and it goes up to 50000-60000 dollars and you sell. You do not pay tax on that.
  2. If you are being paid in crypto for example working as a programmer or consultant or something you are taxable.
  3. If you are staking it or yield farming it etc. it is not 100% clear.

Some countries have cash based crypto exchanges where, instead of transferring your money to your bank account, you can obtain it in cash instead.

Something worth looking into.