Key Takeaways
- Bitcoin held over three years will be tax-free in the Czech Republic.
- Transactions under 100,000 CZK annually are also tax-exempt.
- The new law aligns with the EU's upcoming MiCA regulations.
The Czech Republic has introduced tax reforms that will exempt Bitcoin and other digital assets from capital gains tax if held for over three years.
The law, passed by the Czech Parliament on December 6, will take effect on January 1, 2025, offering substantial tax relief for long-term Bitcoin holders.
New rules
Under the new rules, individuals are not required to pay capital gains tax on digital assets sold after holding them for three years or longer.
Additionally, annual transactions under 100,000 CZK (around $4,200) will not need to be reported, simplifying taxation for casual users.
Prime Minister Petr Fiala highlighted the modernization brought by the law, saying:
A new time test will apply, which guarantees that if you hold cryptocurrencies for more than three years, their sale will not be taxed. We make life easier for people and support modern technologies.
Retroactive
The law applies retroactively, meaning Bitcoin purchased before 2025 qualifies for tax exemption if sold after meeting the new conditions.
Pavol Rusnak, co-founder of SatoshiLabs, noted the amendment passed nearly unanimously.
Beyond individual investors, the framework addresses Bitcoin-related businesses, ensuring banks can no longer unfairly deny financial services.
The reforms align with the EU’s Markets in Crypto-Assets (MiCA) regulations, setting the stage for standardized digital asset governance across the bloc.
While seen as a progressive step, experts note gaps in guidance, such as verifying asset ownership duration and defining eligible digital assets under the Czech Income Tax Act.
