The Czech Republic has recently approved a new law that exempts crypto transactions from personal taxation if they are under CZK 100,000. This law, set to take effect on January 1, 2025, imposes conditions for crypto assets that are similar to those for securities.
According to accounting firm BDO, the legislation is in line with exemptions for securities transfers. For example, if digital assets are sold after being held for more than three years, they are not subject to tax, which provides an incentive for long-term investment.
However, these cryptocurrencies must not have been part of a business’s assets for three years after the owner stopped self-employment in order to qualify. Prime Minister Petr Fiala also confirmed this development on X, stating that the new law will simplify the lives of crypto holders and support technological innovation.
This proposal comes amidst efforts to establish clearer guidelines for the taxation of digital assets, but the lack of transitional provisions raises some concerns. It is unclear how crypto assets will be treated before 2025, as there is currently no definition for them in the country’s Income Tax Act.
