November 21, 2022

For people who hold shares for between five and eight years, the capital gains tax rate is supposed to decrease from 28% to 22% in Portugal.

The Portuguese government is getting ready to make adjustments to the way capital gains from the stock market are taxed. According to data acquired by ECO, the goal is to help investors and savers who retain stocks for a longer period of time through a reduction in the tax payment on gains.

Making a tax differential between short-term capital gains and medium- and long-term capital gains is intended to increase the appeal of the stock market as a vehicle for long-term savings. Currently, a 28% personal income tax is applied to capital gains on securities.

What modifications are expected? The rate of capital gains will drop to 22% for those who hold securities (such as shares or bonds) for a duration of five to eight years, representing a six percentage point reduction from the current tax structure. For capital gains on securities held for more than eight years, where a rate of 11% will be applied, the tax reduction will be greater.

The changes that were coming were already partially revealed by the finance minister in September.

Fernando Medina stated at a Securities Market Commission event that “it is anticipated that we will soon be able to present a set of measures that will support the market and long-term savings in Portugal,” benefiting from input from a broad base of stakeholders within a working group promoted by the government. The finance ministry was contacted, but had not responded by the time this article was published.

In the meantime, there was no update on this topic when the State Budget for 2023 was presented last month.

Source: Econews
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