President signs law on financial market digitization: Revolution for cryptocurrencies in Czechia

2/ 7/2025

Yesterday, the president signed a bill on the digitization of the financial market, completing the legislative process and clearing the way for the law to be published in the Collection of Laws and International Treaties. This step brings fundamental changes to the Czech market for crypto assets and financial assets.

Objectives of the new legislation

The main purpose of the new legislation is to implement European Union regulations in the area of digital finance. The key regulations covered by the law are:

  • DORA (Digital Operational Resilience Act) – focused on the digital operational resilience of the financial sector,

  • MiCA (Markets in Crypto Assets) – regulation of cryptoasset markets.

The new rules will primarily affect the licensing and supervision of cryptoasset service providers. The Czech National Bank will gain the power to license these entities, monitor their activities, and impose sanctions for breaches of their obligations.

Changes in the area of taxation

The changes related to crypto assets also include a tax amendment that introduces a time and value test for the taxation of income from crypto assets. The conditions for tax exemption will continue to be similar to those for securities.

  • Time test: If an investor holds crypto assets for at least three years, the profit from their sale will be exempt from income tax. This exemption also applies retroactively, i.e., to crypto assets held three years before the law came into effect. However, the exemption does not apply to crypto assets that are or were part of business assets.

  • Value test: Tax exemption will apply to income from the transfer of crypto assets for consideration, with the exception of electronic money tokens, if the taxpayer's total income does not exceed CZK 100,000 in the tax period. Again, this exemption does not apply to income from the sale of crypto assets that are or were included in business assets.

  • Aggregate limit: If income from the sale of crypto assets exceeds CZK 40 million, the excess amount will be taxed regardless of the time and value test.

In 2025, investors will have to carefully record the moment of realization of income from the sale of crypto assets. No tax exemption will be possible for income earned before the law comes into effect.

What does this mean for investors?

The law brings clearer rules for the cryptocurrency market in Czechia and strengthens the supervision of service providers. Thanks to the time test, long-term investors can profit without a tax burden, while the value test reduces the administrative burden for small investors in crypto assets.

The new legislation thus represents a step towards greater stability and regulation of digital finance in the Czech Republic.

Mgr. Adam Kotek, trainee lawyer