The Czech Republic is working on advancing legislation to simplify crypto tax obligations and abolish capital gains tax on Bitcoin (BTC) held for at least three years starting in 2025.
The new legislation could significantly boost crypto investment despite its lack of guidance and clear implementation strategies.
Czech Republic Abolishes Capital Gains Tax On Bitcoin
Prime Minister Petr Fiala announced the news, adding that the proposal, supported by Chamber of Deputies member Jiri Havranek, will help reduce the burden on taxpayers. The proposed amendment exempts Bitcoin and other cryptocurrencies from capital gains tax.
“No capital gains tax on bitcoin has just been passed in The Czech Republic with all members of the parliament voting for it.”
The measures align with the Czech Republic’s efforts to streamline cryptocurrency regulations and foster a more crypto-friendly environment. The Czech Republic's Prime Minister stated on X,
“A new time test will apply that 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.”
Pavel Rusnak, co-founder of SatoshiLabs, the company behind the Trezor Wallet, shed some light on the amendment, adding it was passed by 169 votes, with almost all parliamentarians backing it. Under the policy, investors will not be required to pay capital gains tax on profits from the sale of BTC and other cryptocurrencies if they meet two conditions. The total gross income from the sale of crypto assets in a year must not exceed CZK 100,000, and the investor must hold the assets for more than three years.
The exemption for cryptocurrencies is similar to the existing tax exemption for securities, part of ongoing discussions about reforms in crypto taxation in the country, intended to align with EU regulations. Previously, profits from crypto transactions were subject to a capital gains tax rate that varied between 0% and 19%, depending on the nature of gains and other factors.
However, the authorities have not released additional guidance on implementing the new rules. This means taxpayers must rely on general principles. Without a dedicated definition of digital assets in the Income Tax Act, the exemption could apply to various crypto holdings.
Global Crypto Taxation Policies
Tax policies on crypto transactions vary significantly across the globe. For example, in the US, capital gains tax on crypto and other digital assets ranges from 15% to 20%, depending on income brackets. Italy considered raising the tax on crypto transactions above 2,000 euros to 42%. However, the government ultimately settled on a 28% tax rate. Russia recently classified crypto as a taxable property, with mining income now taxed based on market value, allowing crypto miners to deduct expenses while capping personal income tax on crypto-related earnings at 15%.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
