Country overview

#14

Czech Republic

Country stats

Rating Points

400

This indicator describes the overall rating of a given jurisdiction on several parameters according to cryptocurrency operations - market volume, crypto regulation, business climate, taxation framework.

Crypto Penetration

1.9%

Estimated percentage of crypto users out of the country's total population based on public data.

Legal Entities

Number of crypto companies registered in the country based on regulator data if available or other types of public data.

Regulation Points

210

An overall assessment of the granularity of crypto regulation in a given country. A high score is also given to countries where cryptocurrency transactions are highly regulated.

Amount of crypto users

199 500

Total amount of crypto users out of the country's total population based on public data.

Taxation points

This figure, according to our analysts' calculations, indicates the overall level of tax burden for cryptocurrency transactions in a given country. The higher the indicator, the lower the burden.

Market volume points

102.8

A rough estimate of this jurisdiction's retail crypto market relative to the rest of the world. The higher the indicator, the higher the market potential.

Status of crypto

Legally allowed

General status of cryptocurrency regulation in this jurisdiction.

Crypto payments

Legally allowed

The legal status of cryptocurrency payments for goods and services in a given country based on information from regulators, public data and feedback from our community.

Security Level

Safe place

The overall level of security in a given country based on open data.

Crypto Salaries

Only part

The legal status of cryptocurrency salaries to employers in a given country based on information from regulators, public data and feedback from our community.

Business Climate

Good

Overall assessment of the friendliness of this country for crypto-business. This indicator takes into account the cost of obtaining a license and the attitude towards crypto entities in the country.

Stablecoin Regulation

Low

This indicator is evaluating the regulation of stablecoins in a given country. Complex regulation means that it is possible to issue steiblcoins and obtain a license for this activity. Basic regulation means that the issuance of stablecoins is possible, but not all legal aspects are defined in the law. Standard regulation means that there is a legal practice of steylcoin circulation in a given country.

Bad Factors

This section describes the unfavorable economic factors for crypto-business in a given country. These are countries that are under sanctions or on the FATF grey list and other factors.

Types of licenses

Crypto-to-fiat

This type of license regulates the exchange from cryptocurrency to fiat.

Crypto-to-crypto

This license type allows VASP to provide legal exchange from one cryptocurrency to another.

Wallet/Custody

This country has a legal licensing procedure for companies that store cryptocurrency - - crypto wallet providers and custodians.

Good

Medium

Bad

intro

The Czech Republic, also called Chechia, is one of the European countries with a fairly developed regulation of cryptocurrencies. However, this regulation only covers some possible niches.

Security level

The Czech Republic has a safe place security level according to our rating. It also has 73.2 points (from 100) for safety level in Numbeo crime rating (1). The h omicide level (2) is 0.4 per 100,000 inhabitants a year. Story of firearm-related death (3) 1.64 per 100,000 inhabitants a year.

Crypto Payments

According to the Czech National Bank (4)

The use of virtual currencies as a means of payment is not prohibited by law.

The Czech Ministry of Finance has also released a statement confirming that cryptocurrencies are legal in the country and that businesses may accept them as payment.

Moreover, according to the local lawyers association BNT (5), both individuals and legal entities can pay for goods and services in crypto, but they need to pay tax for this type of transaction as a conversion of their crypto to fiat.

the purchase and sale of goods/services against cryptocurrency is a barter transaction which is treated from a tax point of view as the purchase and sale of a thing.

Crypto Salaries

No data.

Legal

Chech Republic is one of the pro-crypto countries in Europe. The Finance Ministry and The Czech National Bank (CNB) are the main crypto regulators in the country. Even in 2017, the CNB posted a statement, “Don’t be afraid of Bitcoin” (6).

According to Gofaizen & Sherle (7), cryptocurrency services in the country are also regulated by the Czech Ministry Of Industry And Trade (8). This institution provides an overview of registered crypto services. The minimum capital for crypto companies is almost 0 (1 Czech Krone).

More details

Czech legal acts also don’t establish separate requirements for incorporation of crypto-related companies. Therefore, Czech crypto company establishment may take from 1 up to 3 weeks and this term allows to pass all stages, including incorporation and obtaining of crypto license at Trade Licensing Register(8¹). Despite the absence of the licensing process ordinary for financial institutions supervised by the Czech National Bank (CNB), Czech companies involved in crypto-related activities are considered as obliged entities and have a supervisory authority in the form financial intelligence unit - Financial Analytical Office (FAÚ), which is responsible for control over their duties arising from Czech AML Act(8²).

According to rue.ee (9), the price of a crypto license in the Czech Republic is about €3400.

You may find more data about license requirements on the site (10) of the Czech Ministry of Industry and Trade. For example, Bitpanda GmbH (11) has a license from the Czech Ministry of Industry and Trade under 11716584.

The list of legal acts dedicated to crypto regulation in Czechia includes, according to Gofaizen & Sherle :

Legal Acts

Act on Certain Measures Against the Legalization of Proceeds of Crime and the Financing of Terrorism (12)

Criminal Code (13)

International Sanctions Implementation Act (14)

Trade Licensing Act (15)

Business Corporations Act (16)

Implementation of MiCAR in the Czech Republic started on June 30, 2024. The current licensing regime will change in 2025 to a CASP license, which the Czech National Bank will regulate. However, as of September 2024, the draft law (17) regulating CASPs and legal acts defining the details of the transition period have not been implemented yet.

Nevertheless, according to our information, the new regulation has already been adopted in general terms, and VASP licensees are preparing to change their status to CASP, for which they have time until mid-2024. Also in the end of 2024, Czech Republic has announced new bonuses for crypto sector - softening AML procedure for legal enities, to open bank accounts and also tax exemption from CGT for long term crypto holders.

Taxation

Tax name	Index
PIT tax Min	15
PIT tax Max	23
Corporate tax (CIT)	19
Min Individual CGT (for crypto)	15
Max Individual CGT (for crypto)	23
Wealth tax Min	0
Wealth tax Max	0

An official document from the Tax Authority (18) regulating cryptocurrency taxation describes the most basic cases.

PIT

Based on local lawyers from BNT (19), personal income from self-employment in crypto, mining, and crypto trading is a subject of PIT with a 15-23% rate.

CGT

Based on PWC tax summaries (20), the CGT rate in the Chezh Republic is the same as the PIT.

CIT

According to PWC tax summaries (21), the CIT tax rate in the country is 19%. According to local lawyers from BNT (22), mining itself isn’t taxable.

…income arises only at the moment of the sale of the cryptocurrency (i.e. its exchange for a fiat currency), the exchange of cryptocurrency for goods or services, or the exchange of one cryptocurrency for another.

Also, crypto isn’t recognized on the company’s balance sheet.

Links

1)Crime Index by Country 2023 Mid-Year

2)List of countries by intentional homicide rate

3)List of countries by firearm-related death rate

4)Czech National Bank

5 and 22)Cryptocurrencies and taxes in the Czech Republic – a brief overview of the implications for legal entities and natural persons. April 26, 2022. Article

6)Cointelegraph. Czech National Bank Assures Cryptocurrencies Do Not Threaten Traditional Banking System. JOSHUA ALTHAUSER. AUG 04, 2017. Article

7)CRYPTO LICENSE IN CZECH REPUBLIC

8 and 10)Ministry of Industry and Trade. Licensed Trades. Article

8¹)Trade Licensing Register

8²)Czech AML Act