- Home
- Portugal Tax Guide
- FX Rate for Capital Gains
Which exchange rate should you use for capital gains in Portugal? The sale-date rule
Bought shares in dollars and sold years later? Before filling in Anexo J (or G), you need to convert the amounts to euros - and the choice of exchange rate changes the tax you pay.
Direct answer
In Portugal, capital gains on foreign-currency securities are converted to euros using the exchange rate of the sale date, applied to both the acquisition value and the realization value. In practice, the gain is computed in the original currency (for example, in dollars) and converted at the rate of the disposal date. The legal basis is article 23 of the Portuguese IRS Code (CIRS). If the dates cannot be evidenced, the 31 December rate applies (art. 23(2)).
What the law says: article 23 of the CIRS
Anexo J requires amounts in euros, but the official form instructions never say which exchange rate to use. The rule lives in article 23 of the CIRS ("Values set in currency without legal tender in Portugal"), which governs the conversion of income - not of individual transactions:
"For income arising from abroad, the buying exchange rate of the date on which it was paid or made available to the taxpayer applies" - article 23(1)(b) of the CIRS (our translation).
The decisive word is "income". When you sell shares, the taxable income is neither the purchase price nor the sale price: it is the capital gain - and the gain only arises, and only becomes available to the investor, on the disposal date. The gain is therefore computed in the original currency and converted at that date's rate. Mathematically, that is the same as converting the acquisition value and the realization value both at the sale-date rate.
This is exactly the practice published by Portuguese financial institutions. Banco BiG's tax FAQ answers the question "which exchange rate should be used?" with: "applying the exchange rate of the date on which the income was obtained (i.e. the date of the transaction/disposal)" - and the bank's official example converts a 2014 purchase and a 2022 sale at the same rate: the sale date's. The Practical Guide on Securities Capital Gains from the Portuguese Order of Certified Accountants (OCC) likewise refers the currency conversion of this income to article 23 of the CIRS.
Worked example with real ECB rates
Purchase of 100 US shares for USD 1,500 on 24-03-2021 (ECB reference rate: 1.1825 USD per EUR) and sale for USD 1,800 on 10-05-2024 (rate: 1.0779).
| Transaction | USD amount | Rate applied | EUR amount |
|---|---|---|---|
| Acquisition (24-03-2021) | 1,500.00 | 1.0779 (sale date) | €1,391.59 |
| Realization (10-05-2024) | 1,800.00 | 1.0779 (sale date) | €1,669.91 |
| Capital gain to declare (sale-date method) | €278.32 | ||
Notice: the €278.32 gain is simply the dollar gain (USD 300) converted at the sale-date rate (300 ÷ 1.0779). The currency movement between 2021 and 2024 plays no role in the calculation.
What if each leg used its own date's rate?
Converting the acquisition at the 2021 rate (1,500 ÷ 1.1825 = €1,268.50), the "gain" would become €401.41 - €123.09 more than the real dollar gain. That difference does not come from the shares: it is purely the dollar's appreciation against the euro over the period. This alternative reading circulates in some online guides, but it converts cash flows instead of income and therefore taxes currency movements without a legal rule providing for it.
Fallback rule and where the rates come from
- Dates cannot be evidenced? The 31 December rate of the income year applies (art. 23(2) CIRS). It is a fallback, not the default method.
- Which rates? The ECB reference exchange rates, which are the ones published by Banco de Portugal - the values are identical. They are available in the Banco de Portugal converter and in the ECB's eurofxref history.
- Dividends and interest follow the same article-23 logic: buying rate of the date they were paid or made available.
How Tax-Wizard applies this rule
Tax-Wizard supports all three FX conversion methods and automatically selects the correct one for Portugal:
- Selling-date exchange rate applied to both operations (default for Portugal) - the method described in this article;
- Separate buy and sell rates - used by default in other jurisdictions that tax per transaction;
- 31 December rate - the fallback rule of art. 23(2).
Upload your broker statements (Revolut, DEGIRO, IBKR, Trading 212, eToro, XTB and 20+ others) and Tax-Wizard converts every transaction with ECB reference rates and generates Anexos J, G, G1 and E ready to submit. See the complete Portugal tax guide for investors.
Frequently asked questions
Which exchange rate should I use to declare capital gains on foreign shares in the Portuguese IRS?
The exchange rate of the sale (disposal) date, applied to both the acquisition value and the realization value. The gain is computed in the original currency and converted to euros at the buying rate of the day the income was obtained - the sale date (article 23(1)(b) of the CIRS).
Why is the acquisition value not converted at the purchase-date rate?
Because article 23 of the CIRS converts income, not cash flows. The taxable income is the capital gain itself, which only arises on the sale date. Converting each leg at its own date would also tax the currency movement, something the law does not provide for in personal capital gains on securities.
What if I cannot prove the transaction dates?
Then the 31 December rate of the year the income relates to applies, under article 23(2) of the CIRS. It is a fallback rule, not the default method.
Should I use Banco de Portugal or ECB rates?
They are the same: Banco de Portugal publishes the European Central Bank (ECB) reference exchange rates. Tax-Wizard uses the official ECB reference rate history (eurofxref) in all calculations.
Are currency gains taxed within capital gains on shares?
Under the sale-date method, the currency component is neither taxed nor deductible on its own: what is taxed is the gain computed in the original currency, converted at the sale-date rate. Converting each leg at its own date would let currency swings artificially inflate or reduce the gain.
Does the Portuguese Tax Authority have an official position on this?
There is no known binding ruling (informação vinculativa) from the AT specifically on foreign-currency securities gains. The legal basis is article 23 of the CIRS, and the practice of Portuguese financial institutions (for example, Banco BiG's tax FAQs) applies the sale-date rate to both values. When in doubt, consult a certified accountant or request a binding ruling.
Sources
- Article 23 of the CIRS - Values set in currency without legal tender in Portugal (Portal das Finanças)
- Banco BiG - IRS 2022 FAQ, question 12 - official example applying the sale-date rate to both acquisition and realization
- OCC - Practical Guide: Securities Capital Gains and Investment Income (2025) - currency conversion under article 23 of the CIRS
- Modelo 3 - Anexo J form and filling instructions (Portal das Finanças)
This article is for information purposes and is not tax advice. There is no known binding ruling from the Portuguese Tax Authority specifically on this matter for securities; when in doubt, consult a certified accountant.