President of the Czech Republic Petr Pavel has signed the bill exempting bitcoin holdings of more than three years from capital gains tax — a largely symbolic act that officially makes the historic bill the law of the land, according to local news sources.

The tax exemption bill, which was unanimously approved by the country’s parliament in early December, will also apply to cryptocurrencies purchased before 2025, if they are sold under the specified conditions in subsequent tax years.

In addition, taxpayers will not be required to report transactions valued at less than 100,000 koruna (~$4,100). Previously, like in the U.S., all transactions were considered taxable events.

Parliamentary representatives have previously said the tax amendments were part of the country’s efforts to align itself with Europe’s comprehensive Markets in Crypto-Assets (MiCA) regulatory framework, which went into effect late last year.

The Czech Republic offering tax incentives to long-term crypto holders is just part of many reforms being attempted in the country. For instance, Andrej Babiš, the billionaire former Czech prime minister and current leader of the conservative ANO 2011 political party, urged balanced cryptocurrency regulations and fair tax policies during his keynote speech at The Block's Emergence conference in Prague this past December.

Last week, the board of the Czech National Bank approved a proposal to weigh investing in additional asset classes, including bitcoin, as a bid to diversify its reserves. According to Governor Michl, the bank could allocate as much as 5% of the bank’s €140 billion ($146 billion) reserves to bitcoin.

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