Portugal’s Autoridade Tributária e Aduaneira has published guidelines for how value-added tax regulations may be applied to initial coin offerings.
Portugal's Tax and Customs Authority, or Autoridade Tributária e Aduaneira (AT), published[1] guidelines (in Portuguese) of how certain tokens could be taxed.
The publication came in response to a company that is planning an initial coin offering on the Ethereum platform and requested clarification as to whether its token would qualify for a value-added tax (VAT) exemption. Per the translation, "It intends to build an electronic commerce platform called MMM. This platform will be global and will have a currency or token that is necessary for users to utilize the service." It should be noted that MMM[2] has previously been accused[3] of being a Ponzi scheme.
VAT[4] is a system by which products are taxed at each stage of production from manufacturing to sale, instead of only having tax applied at the end point of sale. Most goods and services purchased within the European Union are subject to VAT, but exports sold abroad are usually exempt. According to the document, MMM explained that its customers "may come from around the world, some Portuguese, many from the Euro zone and still more from outside, [such as the] USA, China, etc.."
Whether a VAT will apply depends on the parties involved in the transaction as well as the nature of the good or service, and because cryptocurrency tokens can be used in many different ways, the taxation of the digital assets must be determined on a case-by-case basis.
The AT determined that if a token is used in an exchange for a good or service, or for a function such as to execute an EDCC, it should not be
