Tax and Legal News – December 2025

What awaits us in 2026?

Another year has passed, and once again it's time for my Advent editorial. So, as per tradition, I will take stock and outline the prospects for 2026.

From the perspective of tax changes, election years are usually somewhat inconsequential, with only very cautious, technical, and, above all, non-controversial interventions being made. Alternatively, changes may be popular, but this is difficult in the area of taxation (even less sophisticated voters have already recognized the incompatibility of tax cuts and increased public spending). Or, on the contrary, it may be possible to slip in, or rather discreetly push through, some serious lobbying shrapnel.

The Czech Republic's unique exemption on securities sales, thanks to this inconspicuous amendment, has finally been resurrected, and the 40 million cap will be abolished in 2026.

On the other hand, the sale of cryptocurrencies after three years of ownership is exempted. So far, the limit is 40 million, but who knows how long this limitation will survive? After all, Czech crypto wallets are very well-stocked, and the Czech Republic is often referred to as a bitcoin superpower. The bizarreness of the situation is underscored by the fact that the outgoing government's consolidation package, in its extraordinary zeal to eliminate as many exceptions as possible, has eliminated the exemption of exchange rate differences for individuals. So we will tax speculation on exchange rate movements of traditional fiat currencies, but not adventures in crypto. It will be an adventure for taxpayers and the tax administration to prove that they have held a specific bitcoin for three years without interruption. (And I would like to remind you that the burden of proof lies with the taxpayer.)

Payroll accountants (and programmers of related software) will receive a wonderful gift in the form of a single monthly employer report. It should replace up to 25 different reports to various authorities. Health insurance companies are missing, which is a shame. But otherwise, after two decades, it's a nicely completed project.

The government currently being formed has already published its policy statement. It has committed not to raise any taxes. It even plans to reduce corporate income tax from the current 21% to 19%. It also talks about establishing a single collection point with the aim of merging the collection of taxes, social security, and health insurance. So even health insurance companies will hopefully be integrated.

Multinational companies should be required to submit advance transfer pricing documentation. That would be a really nice gift for Czech tax advisors.

Individuals will enjoy several tax breaks (school fees, discounts for spouses, working students, and higher discounts for individuals with four or more children). There are also promises of tax exemptions for voluntary tips for employees in the restaurant industry, aka America as our role model.

In the world of VAT, as tradition says catering services tax rates are to be modified. And there should be 0% VAT on prescription drugs (and the associated chaos with drugs that can also be bought over the counter). The recently introduced deadline for VAT refunds on unpaid invoices should be reduced to 3 months.

Last year, we waited in vain for accounting reform to appear under the Christmas tree. However, the current government finally managed to approve a draft of the new accounting law and accompanying regulations, including an amendment to the Income Tax Act, last week and send it out into the world. We will see how the new government deals with it. The current plan is to complete the legislative process in 2026, with a legislative recess in 2027 and a full launch in 2028. This is a big deal that we will be discussing throughout the year. We are already looking forward to it.

Finally, let me thank you for your support and cooperation. The entire tax and legal team wishes you all a wonderful holiday season and all the best for the new year!