Czech Republic scraps capital gains tax on crypto held for over 3 years

The Czech Republic has reportedly passed a law exempting bitcoin holdings of more than three years from capital gains tax. This decision, approved unanimously by the country’s parliament on Dec. 6, is set to take effect on Jan. 1, 2025.

The Czech Republic’s new tax exemption law introduces clear conditions under which cryptocurrency transactions can be excluded from personal taxation, according to Parlamentní Listy news site. "Individuals can benefit from these exemptions if their total gross annual income from cryptoasset transactions does not exceed CZK 100,000 ($4,000)," the Czech media outlet said. "Additionally, digital assets held for more than three years before being sold are also eligible for tax exemption, encouraging long-term holding strategies."

Prime minister of the Czech Republic Petr Fiala posted on X that the new tax rule "guarantees that if you hold cryptocurrencies for more than three years, their sale will not be taxed ... We pushed for better conditions for cryptocurrencies, and make life easier for people and support modern technologies."

To further qualify for the tax exemption, digital assets must not have been part of business assets for at least three years after ceasing self-employment. The new framework also applies retroactively in certain cases. Digital assets acquired before 2025 can still qualify for tax exemptions if they are sold under the specified conditions in subsequent tax years.

EU alignment and future regulatory prospects

The Czech Republic’s reforms are expected to integrate into the European Union’s Markets in Crypto-Assets (MiCA) framework, which will take full effect on Dec. 30, 2024.

MiCA establishes standardized regulations for cryptocurrencies across the E.U., creating a unified legal framework for digital asset operations.

With this reform, the Czech Republic joins countries like Switzerland and the UAE in offering tax incentives to long-term cryptocurrency holders.