Capital Gains Tax Czech Republic 2026

In 2026, the Czech Republic taxes capital gains under its income tax legislation rather than through a separate capital gains tax. Qualifying disposals may be exempt. The CZK 40 million exemption cap has been abolished for securities and ownership interests meeting the holding-period conditions, but remains applicable to qualifying crypto-asset disposals.

General concept of capital gains taxation

Capital gains are treated under income tax legislation as income of an individual received outside of entrepreneurial activity. Such income is subject to inclusion in the tax base under the general rules. The tax burden is determined depending on the total annual income of the taxpayer and is taxed on a progressive scale. The base rate is 15% and is applied to annual income not exceeding the established limit. If this threshold is exceeded, a higher rate of 23% is applied to a part of the income. This applies both to income from the sale of securities, shares, real estate and profits from transactions with crypto-assets.

From 1 January 2026, qualifying sales of securities and ownership interests are exempt without the former CZK 40 million annual cap. The applicable holding periods generally remain three years for securities and five years for ownership interests not represented by securities. Crypto-assets remain subject to a separate CZK 40 million annual cap on the holding-period exemption.

Conditions and terms of holding assets for exemption

Exemption conditions differ by asset type. In 2026, the CZK 40 million cap applies to the crypto-asset holding-period exemption, rather than to qualifying sales of securities or ownership interests. The principal holding-period rules are as follows:

• Securities (shares, bonds): the minimum holding period is 3 years.
• Shares in the authorised capital of legal entities: minimum holding period – 5 years.
• A qualifying house or residential unit: exemption generally requires the seller to have lived there for at least two years immediately before the sale. Ownership for two years alone is insufficient.
• Other real estate: the holding period must generally exceed ten years for property acquired from 1 January 2021, or five years for property acquired earlier. Statutory exceptions and restrictions apply.
• Crypto-assets: qualifying disposals can be exempt after a holding period exceeding three years, subject to the annual CZK 40 million cap and statutory exclusions.

Peculiarities of cryptoasset taxation in the Czech Republic

According to the Czech tax regulation, cryptocurrencies do not qualify as financial instruments. They are treated as property similar to goods, and transactions with them do not fall under the rules provided for securities. The CZK 40 million cap is not an unconditional exemption. It limits the exemption for qualifying crypto-assets held for more than three years. A separate exemption applies where annual gross proceeds from eligible crypto-asset transfers do not exceed CZK 100,000; electronic money tokens are excluded from this value-based exemption. It is also important to take into account that if cryptocurrencies were used as part of business activities (e.g. settlements with counterparties, payment for goods or services), the resulting income is taxable as business income and is taxed taking into account the relevant accounting rules.

Real estate and capital gains

Transactions with immovable property are governed by separate provisions. Income from the sale of immovable property may be exempt from tax under a number of conditions:

• If the property has been used as a principal residence for at least two years immediately prior to its sale, the income is fully exempt.
• The ownership exemption generally applies after more than ten years, or more than five years for property acquired before 1 January 2021. Ordinary letting does not itself prevent exemption. Separate restrictions apply to property included in business assets.
• In some cases, tax exemption is allowed when reinvesting the proceeds in the purchase of new property for personal housing purposes.

Benefits and non-taxable minimums

The Act provides for a number of additional provisions allowing certain income from asset transactions to be excluded from the tax base:

• For the sale of securities in an amount not exceeding CZK 100,000 in a calendar year, the taxpayer is exempt from both the payment of tax and the obligation to declare the relevant income.
• For transactions falling under the minimum limits and not requiring the payment of tax, there is no need to file a tax return, provided that there are no other sources of taxable income.

Procedure for filing a tax return and due date for payment of tax

Taxable capital gains are included in the annual income tax return when the statutory filing conditions are met. Taxable income does not automatically create a filing obligation: the general annual income threshold is CZK 50,000, with separate rules for employees and other specified cases. The ordinary filing period is three months after the tax year ends. It extends to four months where the return is filed electronically after the ordinary deadline, or six months where a tax adviser files it after that deadline or a statutory audit is required. Weekend and public-holiday adjustments apply. The outstanding annual income tax balance is payable by the applicable filing deadline, after deducting advance payments already made. Obligations to make advance payments for subsequent periods do not replace payment of the annual balance.

Practical recommendations for residents and non-residents

To optimise the tax burden, it is recommended to:

• Plan the realisation of assets in advance, taking into account the exemption limit.
• Document the period of ownership of assets and confirm expenses related to their acquisition and realisation.
• In the case of cryptocurrencies, record all transactions, fix the dates of purchase and sale, and maintain a transparent record of the exchange rate value on the date of the transaction.
• Non-residents receiving income from the sale of Czech assets should take into account the provisions of international double tax treaties, as in some cases the tax liability may arise in another jurisdiction.

Czech capital gains tax for private persons and legal entities

Starting from 2025, the Czech Republic has an updated regime for taxation of income from transactions with assets, including securities, capital shares, real estate and crypto-assets. Although there is no stand-alone capital gains tax, gains from the disposal of assets are included in the taxable income tax base and are regulated according to the general principles laid down in the Czech Income Tax Act.

1. General provisions for individuals

Income from capital gains (both financial and non-financial) is subject to personal income tax. Depending on the total amount of annual income, either a basic rate of 15% or an increased rate of 23% is applied. The first rate applies to the amount of income not exceeding the statutory limit, and the second rate applies to the part of income exceeding this threshold. In 2026, the CZK 40 million cap remains relevant to qualifying crypto-asset disposals. It no longer limits the holding-period exemption for securities and ownership interests.

2. Conditions for exemption from taxation

There is no universal two-condition exemption covering all assets. Securities and ownership interests have their own holding-period exemptions, without a CZK 40 million cap in 2026. Crypto-assets have a three-year holding-period exemption subject to that cap, while real estate is governed by separate residence, ownership and housing-use conditions.

3. Cryptocurrencies

Since 15 February 2025, individuals may qualify for crypto-asset disposal exemptions based on annual gross proceeds not exceeding CZK 100,000 or a holding period exceeding three years. Statutory exclusions apply, including restrictions concerning business assets. The holding-period exemption remains capped at CZK 40 million annually in 2026. Cryptocurrencies acquired for investment purposes are taxable at the moment they are exchanged for fiat funds, other tokens, goods or services. Income is determined as the difference between the selling price and the documented acquisition and holding costs.

4. Real estate

Real estate transactions are taxed depending on the length of ownership and the nature of the use of the property:

• no tax is levied on the sale of a principal dwelling used for at least two years;
• other real estate generally qualifies after more than ten years of ownership, or five years if acquired before 1 January 2021; alternative exemptions may apply where proceeds are used for qualifying personal housing needs;
• ordinary rental use does not itself disqualify a property from the ownership-period exemption; letting and inclusion in business assets must be distinguished.

5. Capital gains from legal persons

In the case of legal entities, including Czech and foreign companies, capital gains are not distinguished as a separate category of income, but are included in the total taxable result. Income from the sale of assets (securities, shares, crypto-assets, real estate) is subject to income tax at the rate of 21%. Tax deferral or relief is possible for certain types of income (e.g. participation in holding structures, holding shares for 12 months or more, participation in EU-registered companies), but such relief is subject to strict conditions, including verification of the business purpose and ownership structure. If a company conducts transactions with crypto-assets, such income is also subject to income tax and the transactions must be accounted for in accordance with Czech or international financial reporting standards (depending on the applicable accounting system).

6. Taxation of non-residents

For individuals who are not tax residents of the Czech Republic, tax liability on capital gains arises in limited cases:

• on the sale of real estate located in the Czech Republic;
• on transfers of interests in Czech-resident companies, subject to domestic exemptions and the applicable tax treaty; Czech domestic source rules do not impose a general minimum ownership percentage for this purpose;
• in other cases if the applicable double taxation treaties provide for taxation of such income in the Czech Republic.

In other cases, taxation may take place in the country of tax residence of the individual. The practical implementation of taxation of non-residents requires analysing the provisions of the relevant international agreement between Czech Republic and the state of residence of the taxpayer. Non-resident legal entities dealing with Czech assets may be obliged to register as a taxpayer and file reports, especially if they have a permanent establishment or conduct regular business activities in the jurisdiction of the Czech Republic.

Examples of capital gains tax calculation in the Czech Republic

Example 1

In 2026, an individual sells shares constituting securities after four years for CZK 38,000,000. Assuming the other statutory conditions are satisfied, the proceeds are exempt under the three-year holding rule, without a CZK 40 million cap. An ordinary ownership interest in an s.r.o. generally requires five years instead.

Example 2

An individual sells qualifying crypto-assets held for more than three years for CZK 45,000,000, with no other relevant disposals that year. CZK 40,000,000 is exempt. The taxable proceeds are CZK 5,000,000, reduced by the corresponding proportion of deductible acquisition costs. The resulting taxable gain is subject to the applicable 15% and 23% rates.

Example 3

A legal entity sold a property that had not previously been used for business purposes for CZK 10,000,000, while the cost price was CZK 7,000,000.
The difference of CZK 3,000,000 is included in the tax base and taxed at the rate of 21%.

Exemption from capital gains tax in the Czech Republic

As of 1 January 2025, in accordance with the provisions of Act No. 349/2023, changes affecting the taxation of personal income from the sale of securities and shares in commercial corporations entered into force in the Czech Republic. A limit on the maximum annual amount exempt from taxation was introduced, which has a significant impact on the tax planning of investors and business owners when deciding whether to sell assets. This reform makes adjustments to the tax strategy of individuals holding corporate rights or investment instruments and requires a more careful approach to structuring dispositions. This contribution examines three key aspects affecting the taxation of investment income, taking into account the updated legal framework.

One of the most discussed elements of the tax reform envisaged in the process of preparing the amendments was the complete abolition of the temporary test for the exemption from income tax of income from the sale of securities and shares in commercial corporations if the amount of such income exceeds CZK 40 million per year. However, this proposal was not approved, thus preserving the principle of tax exemption under the temporary test. From 1 January 2026, the CZK 40 million cap no longer applies to the holding-period exemption for securities and ownership interests. Subject to statutory conditions, securities qualify after three years and ownership interests not represented by securities generally qualify after five years. The former cap remains relevant when assessing income received in 2025. The CZK 40 million cap for securities and ownership interests applied to the 2025 tax period. It must not be extended automatically to instalments received in 2026, when the cap has been abolished. The applicable tax period and transitional rules must be assessed for each payment. The change regarding the application of increased tax rate should also be taken into account. In 2024, the income threshold above which the 23% rate applies instead of the basic rate of 15% was reduced from 48 to 36 multiples of the average salary. This innovation additionally affects the taxation of high-income transactions and requires a comprehensive analysis in tax planning of investment activities.

Sale of securities and shares in the Czech Republic

For qualifying disposals in 2026, the holding-period exemption for securities and ownership interests is no longer restricted by the CZK 40 million cap. Consequently, a valuation as at 31 December 2024 is not a general requirement for obtaining that exemption. The valuation mechanism associated with the former cap concerns the assessment of relevant 2025 income and should not be presented as the standard procedure for 2026 sales.