The Czech Republic is becoming increasingly appealing to crypto investors. A legislative reform signed by President Petr Pavel introduces significantly more favourable conditions for investors and everyday users of cryptocurrencies.
President Petr Pavel has signed a new law reforming the Czech Republic’s tax regulations for cryptocurrencies. The new regulations simplify dealings with digital currencies for both investors and private users. This aligns cryptocurrencies more closely with traditional forms of investment, such as shares or investment funds, potentially promoting wider adoption and greater market stability.
According to the online magazine CzechCrunch, the most significant changes revolve around two key principles: the time test and the value test. The time test (Časový test) benefits long-term holders of cryptocurrencies—sales made after three years are now fully exempt from the 15% capital gains tax. Additionally, the annual exemption limit under the time test is set at CZK 40 million, meaning only profits above this threshold are subject to taxation. The value test (Hodnotový test), on the other hand, benefits users making smaller transactions with cryptocurrencies. As long as their annual income from crypto does not exceed CZK 100,000, they are exempt from tax liability.
New Regulation Grants Legal Right to a Bank Account for Cryptocurrency Companies
Beyond tax advantages, the new law marks a significant shift in how banks interact with cryptocurrency businesses. Until now, many crypto companies faced difficulties in opening and maintaining bank accounts, hampering their operations and growth. The new regulation establishes a legal right to a bank account, removing one of the industry’s biggest barriers.
Recently, Czech National Bank Governor Aleš Michl revealed in an interview with the Financial Times that he plans to propose to the bank’s board the consideration of Bitcoin as a tool to diversify the ČNB’s €140 billion reserve portfolio.
With tax relief and improved regulatory conditions, the Czech Republic is sending a strong signal about its commitment to digital currencies. The new legislation has the potential to establish the country as one of Europe’s premier destinations for crypto investors.
