The Czech Republic is expected to exempt capital gains from cryptocurrency if held for over 3 years and traded under $4,200/year, creating incentives for the cryptocurrency industry.
The Czech Republic is moving to pass a law exempting capital gains from cryptocurrency transactions if citizens hold the assets for over 3 years.
The proposal was announced by Prime Minister Petr Fiala on X on December 6th and is supported by MP Jiří Havránek. Additionally, taxpayers will not have to declare cryptocurrency transactions worth less than 100,000 koruna (equivalent to $4,200) per year. The move is expected to encourage the use and investment in cryptocurrency in the Czech Republic.
Facilitating the cryptocurrency market
According to Prime Minister Fiala, the tax exemption will simplify everyday cryptocurrency transactions. "This means that, for example, buying coffee with Bitcoin will no longer be considered a taxable transaction," Fiala said. MP Jan Skopeček confirmed that the Chamber of Deputies approved the holding period and transaction value conditions in the session on December 6th.
According to a Chamber of Deputies spokesperson, the tax changes are within the framework of the EU's Markets in Crypto-Assets (MiCA) regulation, aimed at facilitating the development of the cryptocurrency industry in the Czech Republic. "Today, we have taken an important step for the cryptocurrency business in the Czech Republic to operate and continue to develop," the spokesperson emphasized.
This proposal by the Czech Republic contrasts with the trend of increasing taxes on cryptocurrency in some other countries. In the US, capital gains tax on cryptocurrency transactions ranges from 15% to 20% depending on income level. Italy had also planned to increase cryptocurrency capital gains tax to 42% for transactions over 2,000 euros, although there are reports that this increase may be adjusted down to 28%.
