Although it initially seemed that exempting this kind of income had little chance of success, the opposite was true in the end. This legislation made it all the way through the approval process, and in the end, legislators argued over whose merit the legislation actually was.
The basic arrangement is to test the aggregate amount of receipts from these sales in a particular tax year. If the value does not exceed the threshold of CZK 100 thousand, the value of the sales must not exceed CZK 100 thousand. CZK 100, the income from the transfer of crypto-assets for consideration will be exempt. If we do not fit within this modest threshold of 100 thousand. CZK (beware - it is not the tax base from this transaction, but the total amount of income), then we can use probably the most important thing, namely the time test. If the taxpayer has held a particular crypto asset for at least three years immediately before the sale, the income from the sale will be exempt. However, the maximum annual limit on this exempt income will be 40 million. CZK gross. At this ceiling of 40 million. However, care should be taken as the value of the transfer of securities and shares in corporations for consideration is also included in the tax year.
However, this unexpectedly rapid change comes with its own non-standard approval process. This creates many uncertainties that will need to be clarified as soon as possible. For example, it will need to be clarified what all can actually be considered a cryptocurrency. What to do in the event of a merger and amalgamation of crypto-assets. What to do when a crypto-asset is exchanged by its issuer for another crypto-asset. These are not the only questions that KOOV is trying to answer in its forthcoming contribution, when representatives of the Chamber of Tax Advisors (KDP) and the General Financial Directorate (GFD) will try to agree on the basic parameters of this new regulation.
In view of the absence of transitional provisions, the prepared KOOV seeks to confirm that all the points of the amendment to the ITA in question will be applied to all crypto-assets, including those acquired before the amendment takes effect. Furthermore, among other things, we hope for an agreement between the KDP and the GFD that the three-year exemption period will also include the period of holding crypto-assets that ran before the amendment came into force.
Many other questions will probably only be answered by practice. Those who need to implement cryptoasset sales before clarifying at least the basic parameters at the KOOV meeting can only hope that there will be the broadest possible consensus and that the proposals submitted by the KDP representatives will be confirmed by the GFD.
Autor: Jiří Jandečka
The basic arrangement is to test the aggregate amount of receipts from these sales in a particular tax year. If the value does not exceed the threshold of CZK 100 thousand, the value of the sales must not exceed CZK 100 thousand. CZK 100, the income from the transfer of crypto-assets for consideration will be exempt. If we do not fit within this modest threshold of 100 thousand. CZK (beware - it is not the tax base from this transaction, but the total amount of income), then we can use probably the most important thing, namely the time test. If the taxpayer has held a particular crypto asset for at least three years immediately before the sale, the income from the sale will be exempt. However, the maximum annual limit on this exempt income will be 40 million. CZK gross. At this ceiling of 40 million. However, care should be taken as the value of the transfer of securities and shares in corporations for consideration is also included in the tax year.
However, this unexpectedly rapid change comes with its own non-standard approval process. This creates many uncertainties that will need to be clarified as soon as possible. For example, it will need to be clarified what all can actually be considered a cryptocurrency. What to do in the event of a merger and amalgamation of crypto-assets. What to do when a crypto-asset is exchanged by its issuer for another crypto-asset. These are not the only questions that KOOV is trying to answer in its forthcoming contribution, when representatives of the Chamber of Tax Advisors (KDP) and the General Financial Directorate (GFD) will try to agree on the basic parameters of this new regulation.
In view of the absence of transitional provisions, the prepared KOOV seeks to confirm that all the points of the amendment to the ITA in question will be applied to all crypto-assets, including those acquired before the amendment takes effect. Furthermore, among other things, we hope for an agreement between the KDP and the GFD that the three-year exemption period will also include the period of holding crypto-assets that ran before the amendment came into force.
Many other questions will probably only be answered by practice. Those who need to implement cryptoasset sales before clarifying at least the basic parameters at the KOOV meeting can only hope that there will be the broadest possible consensus and that the proposals submitted by the KDP representatives will be confirmed by the GFD.
Autor: Jiří Jandečka