How Capital Income Is Taxed
The Czech Republic does not levy a separate capital gains tax. Dividends, interest, and gains from asset sales fall within the general income-tax system. Companies include capital gains in their corporate income tax base, subject to the 21% rate. Individuals pay progressive rates of 15% and 23% on taxable gains.
Treatment depends on residence, income or asset type, holding period, exemptions and applicable double-taxation treaties.
Dividends for Individuals
Dividends paid by a Czech entity to a Czech-resident individual are subject to a final 15% withholding tax. The same rate applies to EU/EEA non-residents and residents of countries covered by a Double Taxation Treaty (DTT) or Tax Information Exchange Agreement (TIEA) concluded with the Czech Republic.
A treaty may reduce the Czech withholding rate, provided the recipient demonstrates tax residence and beneficial ownership. A 35% rate generally applies to recipients from non-EU jurisdictions without a DTT or TIEA. Foreign dividends and certain foreign-bond interest for Czech residents may enter a separate tax base taxed at 15% (differently from the capital gain; in the case of dividends and interest, the 23% rate does not apply).
Dividends and the Participation Exemption for Companies
Dividends may qualify for the Czech participation exemption. In the standard Czech or EU case, the parent must hold at least 10% of the subsidiary for at least 12 uninterrupted months. Both companies must have an eligible legal form, be subject to corporate taxation and not benefit from a complete corporate-tax exemption.
For dividends distributed by a Czech subsidiary, the exemption may also apply to qualifying parent companies in Iceland, Liechtenstein, Norway and Switzerland. A Czech parent receiving dividends from a third-country subsidiary may qualify where a DTT is in force, the subsidiary has a comparable legal form, is taxed at a nominal rate of at least 12%, and the 10% holding is maintained for 12 months.
Capital Gains for Individuals
Securities, including shares, ETFs and bonds, may be exempt when held for more than three years or when annual gross proceeds do not exceed CZK 100,000. Interests in an s.r.o. or another non-securitised company require more than five years. Crypto-assets may qualify after three years, but the CZK 40 million annual cap remains applicable.
Real-estate gains may be exempt if the seller had their residence in the property for at least two years immediately before the sale, after five years of ownership for other property acquired by 31 December 2020, or after ten years of ownership for property acquired from 1 January 2021. Reinvestment in the taxpayer’s own housing may also support exemption. Cars, ships and aircraft are generally exempt when held for more than one year. Sales of privately held works of art and collectibles are generally exempt without a minimum holding period, provided that the assets are not, and have not been during the previous five years, included in the seller’s business assets.
Companies, Non-Residents and Cross-Border Investors
Companies generally include gains from securities, real estate and other assets in their tax base at 21%, without individual holding-period exemptions. Gains from qualifying subsidiaries may be exempt.
For non-residents, Czech-source dividends may be taxed at 15%, a reduced treaty rate or 35%. Gains from Czech real estate remain taxable in the Czech Republic, while gains from shares or company interests depend on domestic law and the relevant DTT.
Capital Income Taxation: Practical Summary Tables
DIVIDENDS
Table 1 — Dividends received by individuals
| Situation | Rate | Legal basis | Notes |
| Czech resident | 15% final withholding tax (srážková daň) | Sec. 36(2) ITA | Final source levy; foreign dividends form a separate tax base (Sec. 8, 16a ITA) |
| Non-resident of EU/EEA or a treaty (DTT) / information-exchange (TIEA) country | 15% (or reduced treaty rate) | Sec. 36(1), 22 ITA | Reduced treaty rate available upon proof of residence and beneficial ownership |
| Non-resident of a non-DTT/non-TIEA country | 35% | Sec. 36(1)(c) ITA | Increased «non-cooperative jurisdiction» rate |
Table 2 — Dividends received by companies (participation exemption)
| Situation | Treatment | Legal basis | Conditions |
| EU/EEA parent (incl. CH, NO, IS, LI) | Exempt | Sec. 19(1)(ze), (3)–(4) ITA; Dir. 2011/96/EU | Holding ≥ 10% for ≥ 12 uninterrupted months |
| Third-country parent (with DTT) | Exempt | Sec. 19(9)–(10) ITA | DTT in force + subsidiary taxed ≥ 12% + ≥ 10% for 12 months + eligible legal form |
| Non-qualifying holding | 15% (35% if recipient is non-EU without DTT/TIEA) | Sec. 36 ITA | Residents: 15% separate tax base |
CAPITAL GAINS
Table 3 — Capital gains of individuals (non-business assets)
| Asset sold | Exemption (holding / value test) | If taxable | Legal basis |
| Securities (shares, ETFs, bonds) | Exempt if held > 3 years; or gross proceeds ≤ CZK 100,000/year | Sec. 10 ITA 15% / 23% | Sec. 4(1) ITA |
| Interests in an s.r.o. / other companies | Exempt if held > 5 years | Sec. 10 ITA 15% / 23% | Sec. 4(1)(q) ITA |
| Crypto-assets | Exempt if > 3 years, BUT capped at CZK 40m/year | Sec. 10 ITA 15% / 23% | Consolidation package |
| Real estate | Exempt: 2 yrs (own housing); 5 yrs (acquired ≤ 2020); 10 yrs (acquired ≥ 2021); or reinvestment in own housing | Sec. 10 ITA 15% / 23% | Sec. 4(1)(a)–(b) ITA |
| Movable property – incl. WORKS OF ART & collectibles | Generally EXEMPT if not part of business assets and held > 1 year | Sec. 10 / Sec. 7 if business | Sec. 4(1)(c) ITA |
| Cars, vessels, aircraft | Exempt if held > 1 year | Sec. 10 ITA 15% / 23% | Sec. 4(1)(c) ITA |
Note on the CZK 40 million cap. Introduced on 1 January 2025, it also applied to securities and company interests. From 1 January 2026 the cap is abolished for securities and interests (exemption again depends solely on the holding test) and remains in force only for crypto-assets. For 2025 disposals the cap still applies. Works of art held privately for more than one year are normally exempt as «movable property» (Sec. 4(1)(c) ITA): tax arises if the sale occurs within one year of acquisition, if the item is or was a business asset, or if the seller acts as a dealer (business income, Sec. 7 ITA).
Notification duty. Exempt income exceeding CZK 5,000,000 must be reported to the tax authority (Sec. 38v ITA).
Table 4 — Capital gains of companies
| Case | Treatment | Legal basis |
| General rule (securities, real estate, other assets) | Included in the CIT base: 21% – no holding test | Sec. 21 ITA |
| Sale of shares/interests in a subsidiary | Exempt (participation exemption) | Sec. 19(1)(ze) ITA – ≥ 10% for 12 months (EU) or third-country conditions |
| Gains on real estate | 21% | Sec. 21 ITA |
NON-RESIDENTS AND REFERENCE TO TAX TREATIES
Table 5 — Non-resident summary (Czech-source)
| Income | EU/EEA or DTT resident | Non-EU, no DTT/TIEA | Allocation (OECD Model) |
| Czech-source dividends | 15% (or reduced by DTT) | 35% | Art. 10: reduced withholding under DTT |
| Gain on shares/interests in a Czech company | Taxable in CZ unless exempt or DTT applies | Same | Art. 13: usually residence State, save «real-estate-rich» companies |
| Gain on Czech real estate | Always taxable in CZ | Always taxable in CZ | Art. 6/13: State where the asset is located |
| Movable property / works of art | Domestic regime (often exempt) | Same | Art. 13(5): residence State |
The Czech network of double-taxation treaties (DTTs) operates to (i) reduce dividend withholding below the domestic rate and (ii) allocate taxing rights over gains. This paper refers generically to the applicable DTT — treaty rates and specific clauses (e.g. real-estate-rich companies) must be verified case by case. Double taxation is relieved by credit or exemption under the relevant DTT.
FOCUS: downstream taxation in Italy
Czech-source income received by Italian tax residents. Czech withholding (dividends) and taxing rights (gains) combine with Italian taxation under the Italy–Czech Republic DTT.
Table 6 — Recipient resident in Italy
| Recipient | Dividends | Capital gains | Legal basis |
| Individual (non-business) | 26% substitute tax (on the «net-of-foreign-tax» amount for foreign dividends) | 26% (financial «other income») | Arts. 44 & 67 TUIR; Art. 27(4-bis) DPR 600/73; Art. 5 D.Lgs. 461/97 |
| Sole trader / partnership | Taxable at 58.14% of the amount (ordinary IRPEF) | PEX on qualifying gains (41.86% exemption) | Arts. 59 & 58 TUIR |
| Company (IRES) | 95% exemption → effective rate ≈ 1.2% (5% × 24%) | PEX Art. 87: 95% exemption (conditions) | Arts. 89 & 87 TUIR; D.L. 38/2026 |
Double taxation. For an individual using an intermediary, the 26% applies to the net-of-foreign-tax dividend: the foreign withholding is not fully recoverable and remains a cost. The foreign tax credit is governed by Art. 165 TUIR; for IRES taxpayers the credit is proportionally limited to 5% (Art. 165(10) TUIR), consistent with the 95% exemption. D.L. 38/2026 (in force from 28 March 2026, effective 1 January 2026) restored the 95% exemption under Art. 89 TUIR without minimum holding thresholds.
FOCUS: downstream taxation in Spain
Table 7 — Recipient resident in Spain
| Recipient | Dividends | Capital gains | Legal basis |
| Individual (IRPF) | «Savings base», progressive scale 19%–30% | «Savings base» 19%–30% | Arts. 25 & 33 LIRPF; scale Art. 66 LIRPF |
| Company (IS) | 95% exemption (Art. 21 LIS) → effective ≈ 1.25% (5% × 25%) | 95% exemption on gains from the sale of shareholdings (Art. 21.3 LIS) | Conditions: ≥ 5% or acquisition value > €20m; 1 year; non-resident subsidiary taxed ≥ 10% nominal |
Savings scale (2025/2026): 19% up to €6,000; 21% €6,000–50,000; 23% €50,000–200,000; 27% €200,000–300,000; 30% above €300,000. International double taxation is relieved by the «deducción por doble imposición internacional» (Art. 80 LIRPF): the lesser of the foreign tax paid and the Spanish tax on that income is credited. The Spain–Czech Republic DTT applies.
Planning and compliance points to watch:
• 35% rate on dividends to non-DTT/non-TIEA jurisdictions: always confirm treaty coverage before payment (Sec. 36 ITA).
• Reduced treaty rates require a tax-residence certificate and proof of beneficial ownership.
• Holding tests are per asset: securities (3 yrs), interests (5 yrs), real estate (2/5/10 yrs), vehicles/vessels/aircraft/works of art (1 yr).
• CZK 40m cap: in 2025 on securities/interests/crypto; from 2026 crypto only.
• Report exempt income > CZK 5,000,000 (Sec. 38v ITA).
• Downstream: in Italy mind the «net-of-foreign-tax» base on individual foreign dividends; in Spain the progressive savings base.
This document is for information only and does not constitute personalised tax advice. Treaty rates and specific clauses must be verified in the applicable DTT and against the law in force at the transaction date.
