Cryptocurrency transactions are a completely new area for Czech tax legislation, as there is no special regulation in the Czech Republic for income from cryptocurrency transactions.
Income from the sale of bitcoin or other cryptocurrencies should be treated as any other income, so income from cryptocurrencies is taxed. Furthermore, there are no exceptions, such as in securities trading (three-year time test, or 100k limit). The Financial Authority considers cryptocurrencies to be an intangible movable property (i.e. not financial assets). There is an obligation to tax the profit from cryptocurrencies not only when selling / exchanging it for common currency (euros, dollars, crowns etc.), but also when exchanging it for another cryptocurrency. The purchase of goods for cryptocurrencies is also taxed. The profit is then subject to a progressive income tax of 15 or 23% for individuals.
It is also important to mention that these transfers are traceable – banks provide the Financial Authority with data on transfers in the accounts of individuals and stock exchanges or exchange offices data on transactions with cryptocurrencies, including foreign platforms. In addition, information about these transactions from abroad is provided through the so-called international exchange of information.
If you actively trade in cryptocurrencies, exchange them for others, donate or even mine them and then sell them and need a professional assessment from a tax perspective, do not hesitate to contact us. We will be happy to advise you on how properly to tax cryptocurrencies, what prices to use, and select a suitable method of valuing purchases. We will be pleased to make a comprehensive tax assessment of your situation and prepare a income tax return.