Czech Republic to Exempt Bitcoin from Taxes After 3 Years, Central Bank Explores BTC Reserves
The Czech Republic has officially passed a law eliminating capital gains taxes on Bitcoin held for over three years. Signed by President Petr Pavel, the legislation aligns crypto taxation with traditional investments and takes effect mid-2025—a major step toward crypto-friendly regulation.
New Law Simplifies Crypto Taxes
The Czech Chamber of Deputies approved the tax exemption in January as part of broader fiscal reforms. Currently, crypto profits are taxed at 15% for individuals and 19% for companies, with high earners paying up to 23%. The new policy removes these taxes for long-term holders, mirroring benefits already applied to stocks and other assets.
Additionally, crypto transactions under 100,000 CZK (~$4,200) per year will no longer require tax declarations, reducing red tape and encouraging Bitcoin’s use in everyday transactions. Prime Minister Petr Fiala remarked, “Buying a coffee with Bitcoin will no longer be a taxable event.”
This move brings the Czech Republic in line with Germany, where crypto held for over a year is already tax-free. Analysts suggest this could boost the country’s status as a European crypto hub, attracting investors and fostering adoption.
Czech Central Bank Considers Bitcoin Reserves
Beyond tax reforms, the Czech Central Bank (CNB) is weighing the addition of Bitcoin to its reserves. Governor Ales Michl has proposed allocating up to 5% of the country’s $146 billion in foreign exchange reserves to Bitcoin for diversification.
However, the plan faces internal resistance and skepticism from European policymakers, including ECB President Christine Lagarde, who warns about liquidity and stability concerns in reserve assets.
Czech Republic Emerges as a Crypto-Friendly Destination
With these tax incentives and potential institutional adoption, the Czech Republic is positioning itself as one of Europe’s most attractive locations for crypto investors. The combination of tax-free Bitcoin gains and possible central bank backing could drive long-term growth in the country’s blockchain ecosystem.
Featured image from: tronweekly.com