Starting January 1, 2026, there will be no major changes to the Czech VAT Act. The amendments introduced include e.g. mechanism for refund of incorrectly charged VAT directly from the tax authority, provided certain strict conditions are met, or further narrowing of the list of financial services eligible for VAT exemption without the right to deduct to get the VAT Act in line with EU VAT Directive.

More about VAT in Czech Republic.

During 2025, the change in taxation of cryptocurrencies was introduced for individuals. If the individual sells cryptocurrency after 3-year holding period, the income is considered tax free. There was a limitation on tax free income up to CZK 40 million in aggregate for income from sale of shares, sale of stock, and sale of cryptocurrencies. Starting 2026, the limitation of Tax-Free income up to CZK 40 million no longer applies to sale of shares; It applies only to income from the sale of cryptocurrencies. If an individual’s income (not profit) from selling cryptocurrencies exceeds CZK 40 million in a given tax period, it becomes subject to taxation.

There has been a substantial legislation amendment changing the rules for taxation of income derived by an employee from Employee Stock Option Plan (“ESOP“) that came into effect on 1 April 2025. The amendment takes a step back by combining the old and new approaches.

For the sake of completeness, we would like to briefly summarize the previous rules beforehand. The income derived by an employee from ESOP received:

• By 31 December 2023 was taxable at the moment of Vesting (for shares) or Exercise (for stock options);
• Since 1 January 2024, the first of respective taxable events occur (e.g. the moment when the employee sells the shares acquired), i.e. so-called deferred taxation was applied.

However, as of 1 April 2025, the income derived by an employee from ESOP is taxable at the moment of Vesting (for shares) or Exercise (for options), unless the employer submits a notification to the Czech Tax Authority expressing intention to apply a deferred taxation. In other words, the deferred taxation approach can be applied only on condition that its application is announced to the Tax Authority within a respective deadline. Otherwise, the “old“ approach in taxation is applicable.