The Czech Republic abolishes capital gains tax on Bitcoin held for at least three years

Key Takeaways

The Czech Republic has kept Bitcoin for more than three years from capital gains tax from 2025.
The legislation requires that the fund not be part of a business asset to qualify for tax exemption.

The Czech Parliament has voted in favor of a proposed amendment that exempts capital gains from the sale of Bitcoin and other crypto assets from personal income tax, as shared by the analyst famous financier and entrepreneur Kristian Csepcsar.

Capital gains tax on bitcoin just passed in Czech Republic with all members of parliament voting for it 🇨🇿🔥 pic.twitter.com/i7E8aZHC2W

— Kristian Csepcsar (@KristianCsep) December 6, 2024

according to Pavol Rusnak, co-founder of SatoshiLabs, the company behind the world-famous Trezor hardware wallet, the amendment was adopted by 169 votes on December 6, with almost all parliamentarians supporting him.

Under the new policy, individuals will not have to pay capital gains tax on profits from Bitcoin and other crypto assets if they meet two conditions – total income from the sale of crypto assets in a year cannot tax must exceed CZK 100,000 and the crypto assets. held for more than three years, according to October report from KPMG.

The exemption is similar to the existing exemption for securities. It has been part of ongoing discussions about comprehensive crypto tax reforms in the country. These reforms are intended to be in line with EU regulations and could further shape how digital assets are treated under Czech law. The Czech government aims to promote a more favorable environment for crypto investors, as well as participation in the crypto market.

Previously, profits from crypto transactions were subject to a capital gains tax rate that ranged from 0% to 19%, depending on the nature of the gains and other factors. The standard tax rate for personal income derived from crypto trading has been set at 15%.

Assets acquired before 2025 may qualify for the exemption if they are sold under the specified conditions in subsequent tax years.

However, the legislation leaves some technical aspects unclear, including methods to determine the period of ownership, and operates without an explanatory memorandum to address potential uncertainties. there

Czech authorities have not published additional guidelines on the implementation of the new rules, leaving taxpayers and practitioners to rely on general principles. Without a specific definition of digital assets in the Income Tax Act, the exemption could apply to different types of crypto holdings.