Didi Taihuttu, patriarch of the so-called ‘Bitcoin Family,’ is setting down roots in Portugal, Europe’s ultimate crypto tax haven, according to CNBC.
In 2017, Taihuttu, his wife and three kids liquidated all they owned, trading a 2,500-square-foot house and virtually all their earthly possessions for bitcoin and a life on the road. This was back when the price of bitcoin was around $900. The world’s biggest cryptocurrency is currently trading around $41,000 after peaking at about $69,000 in November.
While the Taihuttu contingent won’t disclose the exact size of their crypto nest egg, the 43-year-old father of three says he safeguards the family’s crypto fortune in secret vaults on four different continents, so presumably, their crypto stake is substantial enough to make it worth having to fly across the globe to redeem their decentralized cash.
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.
Settling down is a big deal for the Dutch family of five, who have traveled the world for the last five years. But after spending time in 40 countries, Portugal — which is one of the last places in Europe with a 0% tax on bitcoin — was just too enticing a destination to ignore.
“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,” he said.
The Bitcoin Family isn’t alone in making the move to the Iberian Peninsula. The 2021 population census in Portugal shows that the number of foreign residents in Portugal increased by 40% in the last decade.
Taihuttu’s siblings may also make the move. Didi’s brother and sister are selling their houses and investing that cash into bitcoin.
“We will all be traveling together as one big bitcoin family which is, of course, really cool,” said Taihuttu.
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.
“If you earn cryptocurrency by providing services in Portugal, you need to pay tax on those cryptocurrencies, but I don’t earn anything, at the moment, in Portugal. So for me, it’s 0% tax,” said Taihuttu.