Tax and Legal News – September 2025

How will this end?

And they say taxes are boring! Well, maybe sometimes, but there are also cases comparable to a Mexican telenovela or well-written detective story. 

What’s this about? The exemption of capital gains from the sale of securities by individuals is back on the agenda.

With the holidays behind us, let's look back at the somewhat turbulent developments in this matter.

It is late 2023, and a representative of the Pirate Party (then part of the coalition) submits a proposal to cap the exemption of income from the sale of securities for individuals at CZK 40 million per year, defending the proposal by saying that successful entrepreneurs building family businesses need to be supported, but also taxed appropriately. Otherwise, it would be the poor employees who suffered (again). The second argument put forward is the effort to reduce the number of tax exemptions. 

Those who remember may recall this was not the first attempt to abolish this relatively lenient exemption. However, none of the previous attempts was successful. Until this latest one. Why? Unlike its predecessors, it contained a sophisticated provision allowing the market value of shares on the last day before the limitation came into effect to be deducted from taxable income. And to be on the safe side, the effective date of the change was postponed until the beginning of 2025.  

The amendment to the bill implementing EU regulations in the area of financial market digitization may, for many, have come as a bolt from the blue. Coalition MPs (with massive support from the Czech Cryptocurrency Association) took advantage of the situation and included an exemption for profits from the sale of crypto assets in the bill (with the same limits as those previously approved for securities). The submitting MP, Mr. Havránek, pointed out that the proposal does not give cryptocurrencies any advantage, but merely puts them on an equal footing with securities. In reality, however (unlike securities), this was in fact an extension of the exemption, because under the previous regulation, all such gains were fully taxed. The proposal was unanimously (!) adopted by all members of parliament across the political spectrum on 6 December 2024. A rather unusual St. Nicholas Day gift, it seems. The idea of reducing the number of tax exemptions was lost somewhere in the confusion.

Less than six months after the above changes came into effect, Finance Minister Stanjura presented a proposal in May 2025, during the second reading of the accompanying amendment to the law on unified monthly employer reporting, to abolish the approved exemption ceilings. And it applies across the board, both to securities and crypto assets. According to the minister's reasoning, no one actually knows how to calculate it (which is somewhat true) and it will also lead to a revival and the removal of barriers to doing business on the capital market (debatable). If you are wondering how the proposal relates to the employer's unified monthly report, the answer is simple. It doesn't. However, this being one of the last opportunities to push something through before the elections, why not give it a try? In the end, the Chamber of Deputies did not adopt the proposal.

But we still have the Senate. In late July, it approved an amendment to repeal the aforementioned cap (once again as part of an accompanying amendment to the law on unified monthly reporting by employers) and sent it back to the Chamber of Deputies for discussion. The reasoning behind this was that many business owners do not have heirs, and when such an unfortunate owner has to sell their business, they face not only administrative but also considerable financial burdens. Unlike Minister Stanjura's proposal, this Senate bill was limited to securities (i.e. did not apply to crypto assets). 

So, to summarize: as the Senate bill has just passed, after less than a year we will have the original (unlimited) exemption for securities and a new (limited) exemption for crypto assets.  

In any case, it will be interesting to see how it all turns out. Perhaps the creators will heed the enthusiastic responses from viewers and soon embark on another series.

Have a nice late summer and happy reading!