Czech Republic signs law removing Bitcoin tax for long-term holders

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The Czech Republic will exempt Bitcoin and other digital assets from capital gains tax for holdings kept longer than three years, following President Petr Pavel’s signing of new legislation that aligns crypto taxation with traditional securities.

The law removes tax disadvantages for digital assets by introducing a personal income tax exemption for individuals on crypto profits after a three-year holding period. The exemption applies only to non-business activities.

“The amendment will come into effect in mid-2025,” aligning the Czech Republic’s regulations with the European Union’s Markets in Crypto-Assets (MiCA) framework.

The legislation, approved by the Chamber of Deputies in January, puts digital currencies on equal footing with traditional financial instruments.

Under the new rules, crypto holders who sell their assets after the specified three-year period will not be required to pay income tax on profits.

The law represents part of broader changes aimed at modernizing tax regulations in the Czech Republic, particularly concerning emerging technologies and financial innovations.

Last month, the Czech National Bank considered incorporating Bitcoin into its foreign exchange reserves as a diversification strategy.

The move positions the country as a pro-Bitcoin environment within the European Union, potentially influencing other member states’ policy decisions.

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