In the context of the implementation of EU regulations in the area of financial market digitalization and sustainability financing, the legislators are proposing to exempt income from the transfer of cryptoassets for consideration through an amendment. The exemption will have similar conditions to the exemption for income from the transfer of securities for consideration. If the bill passes the legislative process in time, the amendments should be effective as of January 1, 2025.
At present, income from the transfer of cryptoassets (cryptocurrencies, cryptocurrencies and other cryptoassets) is usually taxed as other income or self-employment income in the tax return without the possibility of exemption of such income. This is because, among other things, cryptoassets are intangible movable items and are not considered securities.
If the amendment is approved in its current wording, it will be possible for the first time for the 2025 tax year to exempt such income from the transfer of cryptoassets for consideration, the total of which for an individual in a calendar year does not exceed CZK 100,000. However, the exemption will not apply to electronic cash tokens.
The second variant of the exemption of income of an individual from the transfer of cryptoassets for consideration will be a situation where the period between the acquisition of the cryptoasset and its transfer is more than 3 years. The period of possession by the decedent's lineal descendants or spouse will count towards the time test. However, income from a future transfer for consideration of a cryptoasset made within 3 years of acquisition cannot be exempted.
In both cases, the crypto-assets must not be included in the business assets of the natural person within 3 years of ceasing to be self-employed in order to benefit from the exemption.
In the case of an exemption due to the time test, an aggregate limit of CZK 40 million will then apply to exempt income, which also applies to sales of securities and business shares from 2025. If this aggregate limit is exceeded (the sum of income from the transfer of securities, business shares and crypto-assets for consideration with the time test being met), the income will be exempted only on a pro rata basis.
The exemption will also apply to crypto-assets acquired before 2025. The timing of the realisation of the income is important and must fall within 2025 and beyond.
Unlike the exemption of income from the transfer of securities and business shares for consideration, it may be difficult in practice to prove that the time test for holding is met. The amendment is also relatively brief in the tax part described above and does not contain an explanatory memorandum explaining the legislator's intention in more detail. Thus, the interpretation of the new provisions may raise a number of question marks, including the interpretation of the concept of crypto-asset itself. We must now await the form in which the amendment will be adopted.
Autor: Monika Lodrová
At present, income from the transfer of cryptoassets (cryptocurrencies, cryptocurrencies and other cryptoassets) is usually taxed as other income or self-employment income in the tax return without the possibility of exemption of such income. This is because, among other things, cryptoassets are intangible movable items and are not considered securities.
If the amendment is approved in its current wording, it will be possible for the first time for the 2025 tax year to exempt such income from the transfer of cryptoassets for consideration, the total of which for an individual in a calendar year does not exceed CZK 100,000. However, the exemption will not apply to electronic cash tokens.
The second variant of the exemption of income of an individual from the transfer of cryptoassets for consideration will be a situation where the period between the acquisition of the cryptoasset and its transfer is more than 3 years. The period of possession by the decedent's lineal descendants or spouse will count towards the time test. However, income from a future transfer for consideration of a cryptoasset made within 3 years of acquisition cannot be exempted.
In both cases, the crypto-assets must not be included in the business assets of the natural person within 3 years of ceasing to be self-employed in order to benefit from the exemption.
In the case of an exemption due to the time test, an aggregate limit of CZK 40 million will then apply to exempt income, which also applies to sales of securities and business shares from 2025. If this aggregate limit is exceeded (the sum of income from the transfer of securities, business shares and crypto-assets for consideration with the time test being met), the income will be exempted only on a pro rata basis.
The exemption will also apply to crypto-assets acquired before 2025. The timing of the realisation of the income is important and must fall within 2025 and beyond.
Unlike the exemption of income from the transfer of securities and business shares for consideration, it may be difficult in practice to prove that the time test for holding is met. The amendment is also relatively brief in the tax part described above and does not contain an explanatory memorandum explaining the legislator's intention in more detail. Thus, the interpretation of the new provisions may raise a number of question marks, including the interpretation of the concept of crypto-asset itself. We must now await the form in which the amendment will be adopted.
Autor: Monika Lodrová