Czech Republic crypto license

Cryptocurrency license is a unique financial instrument that is used by many businesses to increase their equity. Someone is mining the cryptocurrency. Others earn on exchange transactions. Others also participate in trading, but on major exchanges, tracking the trends of the exchange rate. While this direction is relatively new, there is an opportunity to make good money on it. In the foreseeable future, different types of cryptocurrencies may compete with traditional national currencies. These are values expressed in digital form is used as a special exchange and can be registered or sold electronically. The Czech Republic currently does not apply any special legal measures against cryptocurrencies that would prohibit or restrict them.

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The main types of crypto license in the Czech Republic

Czech Republic crypto license is possible to obtain for one of four categories. For example, category 1 licenses are granted to market participants providing investment consulting services. Category 2 licenses participants who perform portfolio management and crypto asset storage operations. The Category 3 license is granted, for example, to participants trading as an agent or trustee principal.

Features of cryptocurrency license in the Czech Republic

The main problem faced by almost all business representatives who want to issue a crypto license is that in countries where it is possible, there are several licensing, regulatory authorities. And in each place their requirements to the applicant. In some structures, cryptocurrency is recognized as a commodity that can be sold and bought. For others, crypts are securities. And still others consider digital currency as property. Therefore, the choice of the regulatory body in which you will undergo licensing processes directly depends on the area in which further activities are planned. Since the National Bank of the Czech Republic does not include Bitcoin among non-cash finances, cryptocurrency can be considered money (in the territory of the country, of course) only conditionally. For the same reasons, converting one cryptocurrency to another or fiat cannot be considered a currency exchange. Such financial transactions are beyond the control of the Central Bank of the Czech Republic. The main bank of the Czech Republic bases its opinion on the cryptocurrency by the fact that digital money does not have a stable rate and technology of purchase, which puts them at a disadvantage against the background of the fiat. Crypto exchanges and cryptocurrency exchangers in the Czech Republic are also outside the jurisdiction of the National Bank.

Taxation cryptocurrency license in the Czech Republic

The tax base is calculated by subtracting the funds spent on the purchase of cryptocurrencies convertible to the Czech crown from the proceeds of the sale of cryptocurrencies also convertible to the Czech crown.

The process is similar to trading any foreign currency. Income from business/business, according to section [ 7 of the Income Tax Act, is considered income of persons who for their services or goods receive payments in cryptocurrencies, whose entire business is focused on cryptocurrencies or whose business is aimed at trading cryptocurrencies on exchanges.

In this case, the entrepreneur is obliged to obtain a business permit, i.e. a private entrepreneur’s license, as well as to pay taxes to the Social Fund and the Medical Fund (only for holders of permanent residence in the Czech Republic or Czech citizenship). In addition, it is possible to realize/apply their expenses officially, and there is a duty to pay income tax. The tax rate for natural persons is 15%. The tax rate for legal entities is 19%. In everything else, the same principles apply as for natural persons.