In a story likely to trigger a lot of new ideas at the Portuguese finance ministry, American news channel CNBC has announced that “the patriarch of the so-called Bitcoin Family is settling down roots in Portugal, Europe’s ultimate crypto tax haven”.
After “spending time in 40 countries”, Didi Taihauttu and his family have discovered that Portugal is “one of the last places in Europe” with a 0% tax on bitcoin.
“You don’t pay any capital gains tax or anything else in Portugal on cryptocurrency,” said Taihuttu. As long as you don’t earn cryptocurrency for providing services in Portugal, you’re in the clear.
“That’s a very beautiful bitcoin heaven,” says the 43-year-old father of three who traded all his possessions back in 2017 for bitcoin “and a life on the road”, and has ended up with what CNBC describes as a bitcoin fortune, “kept in secret vaults on four different continents”.
“With that kind of crypto stake, the tax perks in Portugal are certainly a big draw, though it doesn’t hurt that the country offers a safe and pleasant way of life. In 2021, the country ranked fourth on the Global Peace Index, and it tops the list of best countries for expats”, says CNBC.
But the Bitcoin Family isn’t focused simply on enjoying the fruits of their investments in Portugal’s comparative safety and pleasantness: they appear intent on making even more money by creating a kind of crypto village for fellow Bitcoin enthusiasts attracted by the idea of paying no tax.
Didi Taihuttu’s own siblings “may also make the move”, says the news station. “Didi’s brother and sister are selling their houses and investing that cash into bitcoin”, we’re told.
CNBC explains the ‘beauty’ of Portugal as a crypto tax haven: “Unlike the U.S., which treats virtual currency as property, taxing it in a manner similar to stocks or real property, Portugal views cryptocurrencies as a form of payment. That distinction is a game-changer with respect to taxes.
“Capital gains resulting from crypto transactions such as cashing out and crypto-to-crypto trades are not subject to personal income taxes,” explained Shehan Chandrasekera, a CPA and head of tax strategy at crypto tax software company CoinTracker.io.
“This means that similar to other fiat currencies, gains from buying or selling cryptocurrency are not taxed. It also means that crypto transactions or payments, as well as the exchange of bitcoin for fiat money, are not subject to a value-added tax, or VAT.
“This makes Portugal a really attractive place for crypto users to live,” continued Chandrasekera.
“The only exception to the country’s generous crypto scheme relates to companies registered in Portugal that deal in crypto. These businesses face some taxes under certain circumstances”.
But these do not affect the Bitcoin Family, which simply runs its affairs for itself.
CNBC then gives details of regimes and businesses focused on guiding expats towards residency status.
The station talks to another ‘Bitcoin billionaire’ in Lagos, who claims there are ‘at least three’ more just like him already living in the town, and a further 12 “(mostly from the UK) who are moving to Portugal in the next few months for the crypto tax benefits”.
Dutchman Wout Deley “believes the crypto migration is good for Portugal too”, says CNBC.
“They have a huge brain drain. Younger people are leaving. So they’re trying to be more open to people with capital, digital nomads”.
Meanwhile the Taihuttu’s tell the station they want “to disrupt the typical expat experience in Portugal by building their own crypto village.
“The family is currently shopping for real estate”, says the station. “They’ve narrowed their options down to three different plots of land (one as big as 250,000 acres) along the country’s southern coastline in the Algarve.
“The plan is to run the community in a decentralised fashion, in which the land is divvied up by the square meter and sold as non-fungible tokens, or NFTs, in the order to signify ownership.
“Taihuttu also wants to mine for bitcoin with solar and wind power and then use the heat produced by the rigs to warm houses in the winter, in a sort of closed-loop system.
“The working plan, for now, is to use a decentralized autonomous organization, or DAO, to govern the community. DAOs run on blockchain technology”, says CNBC.
The Taihuttu’s “want to build a decentralized lifestyle, which is the future,” they say.