Long term Bitcoin HODLers in Czech Republic to pay zero capital gains tax from January

The Czech Republic approved an amendment granting exemptions for income from cryptoasset transfers. The move, passed on Dec. 6 and set to take effect on Jan. 1, 2025, introduces conditions under which individuals may exclude such income from personal taxation, echoing some established rules applied to securities.

Under the new framework, individuals can claim an exemption if the total gross annual income from these transactions does not exceed CZK 100,000 and, separately, if digital assets are held for more than three years before the sale.

As Czech consulting firm BDO explained, the legislation parallels exemptions granted to securities transfers, although the threshold for the time test involves a CZK 40 million aggregate limit that also applies to gains from securities and business shares. The measure excludes electronic cash tokens and requires that digital assets are not part of business assets for at least three years after ceasing self-employment.

This initiative appears to align with broader efforts at clarifying digital asset taxation. Implementation would follow ongoing digitalization measures and possible EU-level regulations, and per KPMG, the proposal relies on principles already familiar from securities exemptions. The absence of transitional provisions means digital assets acquired before 2025 may also qualify if sold under these conditions in subsequent tax years, but this raises questions of interpretation.

Without a dedicated definition of digital assets in the Income Tax Act, the scope of the exemption could extend across multiple types of crypto holdings. Interpretive uncertainties remain, as the amendment does not specify how to confirm the length of ownership, and it lacks an explanatory memorandum to clarify legislative intent or address technical ambiguities.

Recent market conditions provide context for shifting regulatory stances. In November, after the U.S. election, Bitcoin reached record highs approaching $100,000, reflecting heightened activity and market interest. Although the amendment focuses on the Czech Republic’s domestic tax environment, it emerges as one among various regulatory adjustments in response to evolving digital asset markets. Some observers note this approach may encourage long-term holding strategies.

As BTC Prague reported, the vote in favor of the exemption framework was unanimous, potentially signaling domestic consensus on encouraging compliant crypto engagement through predictable rules.

The Czech authorities have not indicated any immediate guidance or clarifications on the new rules, leaving practitioners and taxpayers to rely on general principles. The forthcoming effective date could prompt advisors, exchanges, and individual holders to review record-keeping practices, ensuring alignment with a three-year holding criterion and aggregate transaction limits.

Although the legislation’s concise wording may invite future interpretative challenges, the core exemption provisions are now established.