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Today we’ll be discussing different types of taxation for different types of income – specifically talking about crypto.
Some of our subscribers were asking us about the taxation of NFTs in Portugal, so we decided to clear things up, and talk about the matter not only in Portugal but elsewhere.
If you have NFTs in Portugal, how do they get taxed? Well, the good thing is that sometimes you have flexibility in terms of how you define your income.
A good example would be SaaS businesses: sometimes this type of income could be considered royalty, but you could also characterize it as a service or a product. This has different tax consequences. Royalties are taxed quite differently than regular income.
If you’re earning royalties in Portugal you could end up in a zero-tax situation! Also, under some tax treaties, you will have exemptions on this in some other parts of the world. For example, there is no royalties withholding tax between the US and Hungary so if you’re licensing something out in the US out of Hungary there is no withholding tax which is amazing!
This talk about royalties is especially interesting if we’re discussing NFTs. If you are not familiar with NFTs (Non-Fungible Tokens) you can watch our video that explains them.
You can produce NFT art, books, etc. The good thing about NFTs in Portugal is that the income could qualify as royalties and crypto income, which means no taxes. How you plan it out can make a big difference.
The whole point is that you can categorize your income in the most tax-efficient way for you. You can claim it’s dividends, crypto income, capital gains, earned income, or something else depending on the country you’re dealing with. This way you can optimize for a lower tax rate, or even zero in certain cases.
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We are Offshore Citizen team. We help people become global: get a second passport, set up a second residency, pay less taxes, do banking abroad, etc.
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Author: Michael Rosmer
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