Registering a crypto company in the Czech Republic provides many opportunities for running a successful international business.
This license gives the company the right to conduct business throughout the European Union, which makes its services available almost all over the world.
The advantages of the Czech Republic are the relatively low cost of labor, the transparency of the tax system
Types of crypto licenses in Czech Republic:
- The Classical – holders of this license have the right to exchange cryptocurrencies with other
cryptocurrencies; - Fiat – exchange between cryptocurrencies and fiat money for a commission;
- Traditional – intermediation in the exchange of cryptocurrency for fiat money and one
cryptocurrency for another (includes services from The Classical and Fiat type of license); - Specialized – holders of this license have the right to provide services for the creation and storage
of crypto wallets and customer keys (encrypted client keys, crypto-wallets etc.)
A licensed crypto company can perform the following activities:
➢ Exchange of virtual currency to fiat currency
➢ Exchange of fiat currency to virtual currency
➢ Exchange of virtual currency to another virtual currency
➢ Storage of virtual currency on behalf of your clients
➢ Transfer of virtual currency between wallets
➢ Storage of fiat currency on behalf of your client for a certain period of time for the subsequent exchange to
crypto-currency
➢ Crypto wallet and custodian services. A company can use the client’s purse to store the cryptocurrency,
including creating and storing encrypted client keys.
Taxation of Cryptocurrencies in Czech Republic
In Czech Republic, cryptocurrencies are classified as “other assets” for tax purposes. This approach, similar to many other countries, recognizes cryptocurrencies as a unique asset class with distinct characteristics.
Taxation of Cryptocurrency Transactions
Tax obligations on cryptocurrency transactions in Czechia depend on the nature of the transaction and the taxpayer’s status. Here’s an overview:
- Buying and Selling Cryptocurrencies: Any profit made from buying and selling cryptocurrencies is subject to capital gains tax. The taxable gain is calculated as the difference between the selling price and the initial acquisition cost.
- Mining Cryptocurrencies: Mining is treated as a business activity, meaning income from mining is subject to income tax and must be declared as part of the taxpayer’s total taxable income.
- Using Cryptocurrencies for Goods and Services: When cryptocurrencies are used to purchase goods or services, any increase in value since acquisition may trigger capital gains tax.
Tax Rates for Cryptocurrency Transactions
The tax rates applied to cryptocurrency transactions in Czechia vary based on the type of transaction and the taxpayer’s status:
- Capital Gains Tax: Individuals are taxed at a capital gains rate of 15%, while legal entities are taxed at 19%.
- Income Tax: For individuals, the income tax rate ranges from 15% to 40%, depending on their income bracket. For legal entities, the corporate tax rate is a flat 19%.
Legal Framework for Cryptocurrency Taxation
Cryptocurrency taxation in Czech republic is primarily governed by the following legal provisions:
- Income Tax Act (Zákon o dani z příjmů): Articles 4 and 10 establish the legal framework for taxing cryptocurrency transactions.
- Government Regulation No. 73/2021 Coll.: This regulation provides further guidelines on the classification and taxation of cryptocurrencies.
Policy Goals of Cryptocurrency Taxation
The Czech government aims to balance innovation with fairness in taxation. By classifying cryptocurrencies as “other assets” and applying standard tax rates, the government seeks to provide clarity for taxpayers while encouraging the growth of the cryptocurrency sector.
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MiCA regulations in the Czech Republic
The MiCA Regulation is the first comprehensive EU regulation governing cryptoasset markets. Thanks to the effectiveness of the MiCA regulation, the cryptoasset sector is moving from a grey unregulated zone, where legal uncertainty often existed and fraudulent activities increased, to a well-defined and regulated system. The MiCA regulation came into force on 29.06.2023 and is essentially bifurcated: the rules for asset-backed tokens and e-money tokens come into force on 30.06.2024, while the rest of the regulation comes into force on 30.06.2024. 30.12.2024. Crypto service providers that provided their services in the Czech Republic in accordance with the applicable law until 30.12.2024 may continue to provide services until 01.07.2026.
Expenses for the crypto company in Czech Republic:
- Preparation of the necessary documents for registration and incorporation of a new company in the Czech Republic (physical/remote registration);
- Provision of a legal address for the company for a year;
- Payment of the state fees related to the registration and incorporation of the company;
- Registration and incorporation of the Company in accordance with law;
- Assistance in opening corporate account in payment system (crypto-friendly);
- Obtaining from the Trade Licensing Office the necessary authorization (license) for the Company
on providing services related to the virtual assets (crypto-assets) in the Czech Republic; - Preparation of the AML/CFT internal documentation in accordance with the requirements of
AML/CFT law; - Documents delivery by post.
- No requirements for share capital.
Estimated duration of a project:
Company formation – 3-4 weeks
License obtainment – 3-6 weeks.
Total time frames: 1,5-2 months
Please, contact our specialists for more information about fees and personal requirements for your project.
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You can schedule a ZOOM call and discuss your project in details with our qulified specialist !