Before 2017, cryptocurrencies were outside of national legislative regulation and EU regulations have been applied. In 2017 the Czech government adapted the law and imposed obligations on banks, crypto-exchanges and other financial service providers. From then on, they were obliged to have their customers identify themselves for their services. This way, the prosecution of tax evaders or people illegally dealing with cryptocurrencies today is easier for the government. Thus, the interest in getting taxes from crypto users is increasing.
Cryptocurrency taxes for individuals in the Czech Republic
For the periodic selling and buying of cryptocurrencies in the Czech Republic, taxes are calculated on the basis of the difference between spendings for the purchase and income from selling cryptocurrencies. The tax rate applied in this case is 15% and can be compared to trades using foreign currencies.The same procedure applies when receiving payments in cryptocurrencies where the base is calculated this way too: Tax base = Income in CZK from selling cryptocurrencies + Value of cryptocurrencies (indicated in CZK) – Expenses in CZK.
Cryptocurrency regulations for businesses in the Czech Republic
Those operating with cryptocurrencies for business purposes e.g. focusing the entire business on cryptocurrencies, trading on crypto exchanges, are obliged to get a licence for their activities and to pay taxes to the Social Fund and Health Fund. Additionally, mining operations are considered to be activities for business purposes, thus they are liable to taxation. The tax rate in this case is 19%.
Government statements on cryptocurrencies in the Czech Republic
In 2018 the financial ministry of the Czech Republic released further information on cryptocurrencies. In its statement the ministry suggests to categorize all cryptocurrencies the same way, meaning that regardless of the intention or use of the cryptocurrency, may it be speculative, for trading or for mining, all cryptocurrencies are lumped together. As for other assets, however, the ministry recommends making clear records of his cryptocurrencies.
Cryptocurrency info for the Czech Republic
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Sources
http://domytax.cz/blog/single/cryptocurrencies-and-taxes-in-the-czech-republic
https://sb-sb.cz/news/pravovoe-regulirovanie-kriptovalyut-v-chehii
https://byznys.ihned.cz/c1-66142060-kryptomeny-nejsou-penize-ale-zasoby-sveho-druhu-rozhodlo-ministerstvo-financi-nektere-otazky-jak-bitcoin-zauctovat-neosvetlilo
