The Czech Republic has passed legislation exempting Bitcoin and other digital assets from capital gains tax if held for more than three years. This aligns the country's regulations with European Union rules.
Changes in Cryptocurrency Taxation
The law, signed by President Petr Pavel, removes previous tax disadvantages for long-term crypto investors, aligning the treatment of cryptocurrencies with traditional securities. The new law, set to take effect in mid-2025, will apply to individuals and non-business activities.
Approval and Implementation of the Law
The Chamber of Deputies approved the law in January as part of broader efforts to modernize the country's financial regulations. Under the new rules, Bitcoin holders who sell their assets after three years will no longer owe income tax on profits, mirroring the tax treatment of long-term stock investments.
Consideration of Adding Bitcoin to Reserves
The Czech National Bank is reviewing a proposal to add Bitcoin to its reserves, but the process may take months, and any exposure would be far lower than the initially suggested 5%. Governor Ales Michl introduced the idea, but European Central Bank President Christine Lagarde dismissed the proposal, emphasizing the need for liquidity and security in reserves.
The changes to taxation and the proposals to include Bitcoin in reserves highlight Czech efforts to modernize its financial system and align with international standards.
