Taxation of Business Interest Transfers in the Czech Republic in 2026

How taxation of a transfer of an ownership interest works in 2026

In 2026, the date on which you acquired the ownership interest or shares is absolutely crucial for taxation in the Czech Republic. The legislation introduced a CZK 40,000,000 cap for exemption of income from the sale of securities and ownership interests, but with important transitional provisions.

1. Ownership interests acquired by 31 December 2024 (Old regime): If you acquired the ownership interest before the end of 2024, the original rules apply to you due to the transitional provisions. If you meet the time test, the income from the sale is fully exempt from Czech personal income tax, regardless of the sale price.

2.Ownership interests acquired from 1 January 2025 (New regime): For ownership interests acquired after this date, if the time test is met, the exemption applies only up to CZK 40 million per tax period. Income above this amount is taxable (at 15%, or 23% for the portion of the tax base exceeding 36 times the average wage).

Practical impact: A business owner who founded the company in 2010 and sells it in 2026 does not need to worry about the cap – their income is fully exempt. An investor who entered a startup in February 2025 and sells the ownership interest in 2029 will have to tax the amount exceeding CZK 40 million.

Taxation of cryptocurrencies in 2026

In the area of cryptoassets (virtual assets), the situation is different. Income from the sale of cryptocurrencies falls under Section 10 (other income) of the Czech Income Taxes Act. Although the introduction of a time test analogous to securities has been discussed, in practice it is necessary to be cautious. If you sell cryptocurrencies in 2026, the income is generally taxable as other income (the difference between income and expenses).

If a time test were introduced for a specific type of asset (under Section 4 of the Income Taxes Act), the CZK 40 million exemption cap would also apply to it. For strategy, this means: when selling a company and cryptocurrencies in the same year, you cannot automatically aggregate caps or benefits – each asset has its own tax regime.

Value test: CZK 100,000 remains

Alongside the changes, the so-called value test for small investors remains in place. If your aggregate income from the sale of securities or ownership interests is lower than CZK 100,000 in a given calendar year, the income is exempt from tax regardless of the holding period (Section 4(1)(u) of the Income Taxes Act).

For ownership interests in an s.r.o. (Czech limited liability company), this threshold does not apply automatically in the same way as for securities (shares), therefore for the sale of an ownership interest in an s.r.o. the primary test is always the 5-year time test.

What applies without exceptions: Legal and procedural framework

To apply the exemption (whether full or up to the CZK 40 million cap), it is necessary to meet the time test between acquisition and transfer.

• Ownership interest in a business corporation (s.r.o.): At least 5 years.
• Securities (shares in an a.s.): At least 3 years.

The period is calculated from the date you acquire title to the ownership interest to the date of transfer. If you sell the ownership interest earlier, the exemption does not apply and the gain is taxable.

Practical mistake: Calculating the period from the “signing” of the agreement in cases where effectiveness occurs later. For an s.r.o., the transfer becomes effective vis-à-vis the company upon delivery of an effective agreement. For tax purposes, the decisive moment is the transfer of title.

Agreement, signatures and delivery – formal requirements

The transfer of an ownership interest in an s.r.o. is governed by Act No. 90/2012 Coll., on Business Corporations (ZOK) and requires compliance with strict formal requirements (Section 209 ZOK):

1. The ownership interest transfer agreement must be in writing and the signatures of both parties must be officially certified. Without certification, the agreement is invalid.

2. The transfer is effective vis-à-vis the company only as of the date an effective agreement with certified signatures is delivered to the company (to the managing director). Only from this moment may the new shareholder exercise their rights.

3. For a transfer to a third party, consent of the general meeting is often a statutory condition (Section 208 ZOK), unless the articles of association provide otherwise. If consent is not granted within 6 months, the effects of withdrawal from the agreement occur.

Consent of the husband or wife

If the ownership interest forms part of the spouses’ community property (SJM), it cannot be transferred without the consent of the other spouse (Section 714 of the Czech Civil Code). The absence of such consent results in relative invalidity. This means that the transfer is valid unless and until the omitted spouse invokes invalidity before a court.

Solution: The other spouse’s consent should ideally be an integral part of the agreement or provided as a separate document with an officially certified signature.

Practical steps for a transfer in 2026

The agreement on the transfer of a business share must be definite and clear. It must include identification of the parties (name, date of birth/personal identification number, residence or registered office, and company ID number), identification of the company, specification of the share (amount of the contribution, share certificate) and the price with payment terms.

Crucial is the acquirer’s declaration that they accede to the company’s articles of association (deed of incorporation). Failure to accede to the articles of association is a common mistake that leads to the absolute invalidity of the transfer.

Entry in the Commercial Register

The change of shareholder is entered in the Commercial Register upon the company’s application (submitted by the executive director). Although the transfer is effective upon delivery of the agreement to the company, the register entry has declaratory effects and is key for the legal certainty of third parties. The company is obliged to file the application for registration of the change without undue delay (Section 46 of the Act on Public Registers).

Most common mistakes and risks in a transfer

The articles of association often provide for a pre-emptive right of the existing shareholders. If you sell the share to a third party without first offering it to the shareholders, they may seek invalidity of the transfer or require the acquirer to sell the share to them on the same terms.

How to protect yourself: A thorough review of the articles of association by an attorney before starting negotiations on the sale.

Incorrect price setting between related parties

If you transfer a share between related parties (e.g., family, affiliated companies) for a price that differs from the arm’s-length price, and this difference is not satisfactorily substantiated, the tax administrator may adjust the tax base by this difference and assess additional tax (Section 23(7) of the Income Taxes Act).

How to protect yourself: For transactions between related parties, we recommend obtaining an expert valuation report or at least a qualified estimate of market value.

Neglect of the notification obligation

If you have income from the sale of a share that is exempt from tax and this income exceeds CZK 5,000,000, you are obliged to file a Notification of Exempt Income with the tax administrator (Section 38v of the Income Taxes Act). The deadline is the same as for filing the tax return.

Failure to file this notification may result in a penalty of 0.1%, 10% or up to 15% of the amount of the unreported income if the notification is not filed even upon request. 

Example: If you sell a share for CZK 60 million and do not file the notification, you may face a penalty in the millions of Czech crowns.

When it is worth involving an attorney in a share transfer

A share transfer is not just about filling in a template agreement. It is a transaction with long-term legal and tax implications. The new CZK 40 million limit regime requires precise determination of the acquisition date and a tax assessment.

Hidden risks in articles of association (pre-emptive rights, additional contribution obligations) can derail the transaction, and liability for debts associated with the share passes to the acquirer. If you are going through the sale or purchase of a share, the attorneys from ARROWS, a Prague-based law firm, will guide you through the entire process, ensure the contractual documentation, escrow of the purchase price, and registration in the Commercial Register. We are insured for damages up to CZK 400 million. Contact us at consultation@arws.cz.

Final summary

The year 2026 requires increased attention when selling companies, especially with regard to the share acquisition date. While “old” shares (acquired by the end of 2024) benefit from unlimited exemption after 5 years, new investments must take into account the CZK 40 million limit.

The legal process remains formally demanding – a written agreement, notarised signatures and delivery are the necessary minimum. Errors in the process or failure to file the tax notification may lead to severe financial consequences.

To ensure that the transfer proceeds safely and in a tax-efficient manner, the attorneys from ARROWS, a Prague-based law firm, will prepare tailor-made agreements and supervise compliance with all obligations. Contact us at consultation@arws.cz.

Read also:

• Transferring a Business Share in a Czech Family Company: Key Legal Risks
• Hidden Profit Distributions in Czech Companies: Risks and Sanctions in 2026
• Can I Be Personally Liable as a Director of a Czech Company?
• Czech Business Judgment Rule: Protecting Executive Directors from Liability
• Entry to the EU through acquisition: A guide for non-EU buyers