The Czech Republic has passed legislation exempting cryptocurrency holdings from capital gains tax if held for more than three years. This move, unanimously approved by the Czech Parliament on December 6th, is set to come into effect on January 1st, 2025, and signals a significant step towards encouraging long-term cryptocurrency investment within the country.
According to local news outlet Parlamentní Listy, the new law establishes specific conditions for cryptocurrency transactions to be exempt from personal income tax. Individuals whose total annual gross income from cryptocurrency transactions does not exceed CZK 100,000 (approximately $4,000 USD) will qualify for the exemption. Crucially, any digital assets held for over three years before being sold will also be exempt from capital gains, incentivizing a long-term investment approach.
Czech Prime Minister Petr Fiala announced the new tax rule on X (formerly Twitter), stating that it “guarantees that if you hold cryptocurrencies for more than three years, their sale will not be taxed.” He emphasized the government’s commitment to fostering innovation and creating a more favorable environment for cryptocurrencies and modern technologies.
To qualify for the exemption, digital assets cannot have been part of business assets for at least three years after the cessation of self-employment. The law also includes retroactive provisions, allowing digital assets acquired before 2025 to qualify for the exemption if sold under the specified conditions in subsequent tax years.
This new legislation is expected to align with the European Union’s Markets in Crypto-Assets (MiCA) framework, which will be fully implemented on December 30th, 2024.
