Exemption of proceeds from the transfer of crypto-assets for consideration – confirmed practical imp

 

The exemption of income from the transfer of crypto-assets applies from 15 February 2025 

Income up to CZK 100,000 may be tax-exempt without meeting the holding period test

After a three-year holding period, the exemption may reach up to CZK 40 million per year

The Financial Administration has published an interpretation on the exemption of income from the transfer of crypto-assets for consideration, which arose as part of negotiations between the Chamber of Tax Advisors and the General Financial Directorate (the so-called Coordination Committee or KOOV). The exemption of this income has been added to the tax regulations with effect from 15 February 2025. The published interpretation is important for practice, especially because it specifies what is meant by crypto-assets, how to assess crypto-assets acquired before the amendment comes into effect, and how to apply the value limit and the time test in 2025. 

According to the Coordination Committee, for the purposes of the exemption, it is necessary to rely on  the definition of crypto-assets under the MiCA Regulation, i.e. on the European regulatory framework, and not on the purely technical or very broad concept of "cryptocurrency". Thus, the exemption applies only to those crypto-assets that comply with this framework. 

The exemption of income from the transfer of crypto-assets for consideration can generally be applied in two cases: 
 

• Income from the transfer of crypto-assets for consideration in the given tax period does not exceed CZK 100,000, or 
• Kyptoaktivum was held for at least 3 years prior to its transfer for consideration; in such a case, income may be exempt up to CZK 40 million per tax period. 

An important conclusion of the KOOV is that the period of holding cryptoassets before the law came into effect is also included in the three-year holding time test. 

Example: A natural person sold crypto-assets and realized an income of CZK 20 million on 20.5.2025. It purchased crypto-assets on 01/08/2020. The income is fully exempt. 

Given the introduction of the exemption from 15.2.2025 , it was questionable how to apply the exemption criteria for income realised in 2025. The conclusions are as follows: 

1. Income from the transfer of crypto-assets for consideration realized before 14.2.2025 is always taxable. 

Example: A natural person sold crypto-assets and realized an income of CZK 60 thousand on 8 January 2025. The income is taxable in full. 

2. Income from the transfer of crypto-assets for consideration realized from 15.2.2025 is exempt if the amount of such income does not exceed CZK 100,000. 

Example: A natural person sold crypto-assets and realized an income of CZK 60 thousand on 8 January 2025 and further in the amount of CZK 95 thousand on 15 March 2025. It did not make further sales in 2025. 

The income of 60 thousand. CZK is taxable in full. 
Income in the amount of 95 thousand. CZK is fully exempt. 

3. Income from the transfer of crypto-assets held  for consideration for more than 3 years realized from 15 February 2025 is exempt from taxation, up to the amount of CZK 40 million. 

The limit of CZK 40 million is also common to income from the transfer of securities and business shares for consideration after meeting the time test (for 2025). 

Example: A natural person sold crypto-assets and realized an income of CZK 30 million on 8 September 2025. She held the crypto assets for 4 years. It did not make further sales in 2025. The income is fully exempt. 

Example: A natural person sold crypto-assets and realized an income of CZK 30 million on 8 September 2025. It also sold securities and realized an income of CZK 20 million. CZK on 15 January 2025. She held all the assets sold for approximately 4 years before the sale. 

Revenues exceed the common limit of CZK 40 million. Therefore, the exemption will be relatively shortened.