Change in Investment Tax Exemption Limits

Barbora Halousková

When lawmakers approved the introduction of a CZK 40 million limit in 2023 for tax exemption on income from the sale of securities, shares, and cryptoassets, many investors sighed, others calculated how much room they had left under the cap, and the fastest ones started selling. As of 1 January 2025, a new tax reality took effect – where the “holding period” alone was no longer enough; volume had to be monitored too.

The 40 million tax tale: Came quickly, left (partially) just as fast

As is often the case with Czech tax legislation, stability is more of a theoretical concept than a practical experience. So, before taxpayers could even get used to the new regime, a change arrives from 1 January 2026. Not a full repeal – that would be too simple. Instead, an elegant compromise: a partial repeal of the limit, offering relief to some investors while adding another layer of interpretation for others.

How it all started: 2025 and the CZK 40 million tax cap

From 1 January 2025, a new provision in the Income Tax Act introduced a CZK 40 million limit for tax exemption on income from the sale of securities, shares, and cryptoassets (note: For cryptoassets, the tax exemption does not apply from 1 January 2025, but only from 15 February 2025. A time test of 3 years or an annual income of CZK 100,000 applies in this case.). In other words, if you sold investments after meeting the holding period (3 years for securities, 5 years for shares in business corporations and upon liquidation of mutual funds), but your income exceeded CZK 40 million in a tax year, the amount above that limit was no longer exempt.

The limit has applied to the total income from such investments (already qualifying under the holding period) within the calendar year, regardless of how many individual transactions the taxpayer made. For some, it was a minor complication; for others, a reason to optimise their tax strategy.

Backtracking slightly: The change from 1 January 2026

Due to a legislative amendment, the CZK 40 million exemption limit is partially repealed from 1 January 2026. Specifically:

For securities and shares upon liquidation of mutual funds, the limit is abolished – tax exemption will again be based solely on the holding period (3 years for securities, 5 years for shares).
For shares in business corporations, the limit is abolished – exemption will again be based solely on the 5-year holding period (as per Section 4(1)(q) of the Czech Income Tax Act).
For cryptoassets, however, the limit remains – meaning that even after meeting the 3-year holding period, income is exempt only up to CZK 40 million per tax year, with any excess subject to taxation.

According to the Ministry of Finance, this change aims to eliminate technical complications caused by the current limit and to support the development of the capital market. Cryptoassets, it seems, will have to wait a bit longer for their tax redemption – or at least for the next amendment.