World Tax News: Portugal proposes 28% tax on Crypto Gains and more

Editorial Team – [2022] 143 taxmann.com 179 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. Portugal proposes 28% tax on Crypto Gains

Portugal may no longer be a tax haven for crypto investors. As per the report published by the Portuguese Government, a new crypto asset taxation regime will be introduced in its 2023 national budget.

The report provides that the Govt. will tax the income from crypto-assets as business or professional income or capital gains without prejudice to the classification in the other categories.

Capital gains from crypto assets held for less than 1 year will be subject to tax at the rate of 28%, and capital gains from crypto assets held for more than 365 days will be exempt from tax.

The Portuguese Government also intends to impose a 4% tax on free crypto transfers and will apply stamp duties where applicable.

Source: Report of the Portuguese Government

2. Malaysia Budget 2023: Tax cuts for individuals and tax exemptions for women returning to work

On 07-10-2022, the Finance Minister of Malaysia, Mr Tengku Zafrul Aziz, presented the Budget proposal for the year 2023. This is the second Budget tabled under the Government led by the Prime Minister of Malaysia, Datuk Seri Ismail Sabri Yaakob.

The Government of Malaysia has announced several budget allocations, tax incentives, and fiscal measures to support domestic economic growth. Here are some key tax highlights from the proposed Budget:

(a) To encourage women to return to the workforce after a career break, the Government proposes income tax exemptions on the income received for eligible women from 2023 to 2028;

(b) The resident individual’s income tax rate is proposed to be reduced. The new rate would be 11% for the income between RM50,000 to RM70,000 and 19% for the income between RM70,000 to RM100,000;

(c) To support and empower MSMEs, the Government proposes that the tax rate on chargeable income for the first RM100,000 shall be reduced from 17% to 15%;

(d) The Government will introduce the global minimum effective tax rate as recommended under Pillar 2 of the BEPS Action Plan 1 and implement the Qualified Domestic Minimum Top-up Tax by 2024;

(e) The Government proposes a special tax deduction for hotels that buy local handicraft products;

(f) The Government intends to introduce a carbon tax and will study the feasibility of a carbon pricing mechanism;

(g) Unabsorbed carry-forward losses of companies from sectors with a long gestation period can be carried forward for up to 20 years.

Source: Budget Speech 2023

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