Have you dived into the world of investing and are waiting for your return? Great! But now comes the moment when you also need to look at the less sexy part of investing – taxes. There is nothing to worry about, though; we will explain everything clearly, without any fluff, but in a way that does not leave out anything important. Read on and find out under what conditions the state will take a slice of your investment return too (and how to avoid it).
Investing and taxes: Why deal with it right from the start
When you invest, you most often think about the return. Understandably. But just as important as the growth of your portfolio is what remains of it after taxes.
Investing and taxes are, after all, closely linked. Tax laws can significantly affect your returns – sometimes positively (for example, thanks to a tax exemption on an investment), other times negatively (for example, through a high tax burden on certain types of income).
All in all: The taxation of investment returns affects the final profit, which is why it pays to keep your tax obligations in mind already when choosing a specific investment.
What all is taxed? It is not just about stocks and cryptocurrencies
The taxation of income from investments applies to a whole range of returns:
- Capital gains from the sale of stocks, ETFs or cryptocurrencies
- Dividends from stocks and mutual funds
- Interest from bonds, savings accounts and P2P platforms (e.g. Zonky, Portu)
- Profits from crowdowning investments, such as those on InvestBay
Curious about what crowdowning is and why so many investors choose it? Read up on how InvestBay works and find out.
The difference between a tax resident and a non-resident
If you are a tax resident of the Czech Republic, you must report all income in your tax return – both domestic and foreign.
If you are a non-resident, the tax rules are different and, as a rule, you only tax income from Czech sources. The key is to know where your tax domicile is (i.e. where you permanently pay taxes), because that determines your obligation toward the Czech tax authority.
Taxation of investment income: What all falls under income
Interest, dividends, capital gains
Each type of return is taxed a little differently:
| Type of return | Taxation | Income Tax Act |
| Dividends | Withholding tax (usually 15 %) | §8 |
| Interest (from bonds or P2P loans) | Withholding tax (e.g. P2P) | §8 |
| Capital gains (from the sale of investment assets) | Within the tax return | §10 |
The difference between taxing investment returns and taxing the income itself
Investment returns are taxed at the moment of realization (e.g. the sale of a stock). It is therefore not a regular income, but a one-off profit. That is the difference compared to, for example, dividends, which come in regularly and are taxed as ordinary income.
What is the taxation of regular investments
The taxation of regular investments depends on the frequency of purchases and the holding period of each individual purchase. If you invest regularly, for example in ETFs, each individual transaction may be assessed separately – and so each one is subject to the time test individually.
When investments are taxed and when not: Tax exemption
This is a situation where you meet certain conditions and your reward is that you do not have to report the return from the given investment in your tax return. What conditions are these?
1. The time test
If you hold:
- stocks, ETFs and other securities for at least 3 years, the profit from their sale is exempt,
- a property intended for investment for at least 5 years, the profit from the sale is also not subject to tax.
2. The annual limit of CZK 100,000
If you do not exceed CZK 100,000 in turnover from securities sales in a given year, you do not have to tax the return – even without meeting the time test.
A real-life example
In 2020 you bought stocks for CZK 50,000. In 2024 you sell them for CZK 120,000. Because you have held them for more than 3 years, the CZK 70,000 return is completely exempt from tax.
How are investments through InvestBay taxed?
Real estate investments through InvestBay work on the principle of crowdowning – that is, you are a co-owner of a property that generates a return from rent as well as from appreciation upon sale.
With us at InvestBay, you invest in real estate using tokens. A token is essentially a digital share – that is, your "ticket" to a part of a specific property and to the returns this property brings (for example from rent or from its future sale). It is not a financial instrument, but a digital representation of your share.
And what about taxes?
When you sell a token, the tax authority views it as the sale of an item – only in this case an intangible one. You therefore pay tax only on the difference between the amount for which you acquired the token and the price for which you later sold or exchanged it.
The same tax regime applies to returns from holding tokens – that is, your share of the profit from rent and from the sale of properties. Because tokens are not a financial instrument, §8 of the Income Tax Act (capital income) does not apply to them.
For an ordinary investor who does not trade tokens as part of a business, both the sale and the returns from holding them are counted as other income (§10 of the Income Tax Act).
Read more in our frequently asked questions section.
Take a look at our current offering of investment properties.
👉 Try our investment calculator, which will also calculate your expected return after tax.
Taxation of investments in 2025: What has changed?
The exemption after 3 years of holding remains, as does the CZK 100,000 threshold for securities. In 2024 the requirements for record-keeping and profit calculation were made more precise (e.g. the FIFO method – first in, first out), which still applies this year.
For 2025 there were no major changes; however, new reporting obligations have arisen for foreign platforms, which may also affect investors using services such as eToro.
Most small investors remain in the same regime, but it is crucial to correctly record every purchase and sale, especially if you trade regularly or in larger volumes.
How specific types of investments are taxed, point by point
Mutual funds
- Tax exemption after 3 years of holding
- Possibility to deduct costs (entry fees)
- Foreign funds = more administration
P2P platforms
- Zonky, Bondster, Portu: mostly interest income
- With Portu also capital returns → watch the time test
ETFs, stocks and bonds
- ETFs: 3-year time test
- Stocks: the same
- Bonds: interest returns are subject to withholding tax
How to handle investment taxes in practice
How to file a tax return because of investments
Use form type A or B (depending on your situation). You record investment returns in section §10 (other income) or §8 (capital income).
When do you have to file a tax return?
- Employees: the obligation to file a return arises if, in addition to your salary, you also have other income (e.g. from investments, rent or dividends) exceeding CZK 20,000 per year.
- Self-employed: always file a return, unless they are on the flat-rate regime and their income exceeds CZK 50,000 per year.
- Other income: for example occasional earnings or bonuses. If their total exceeds CZK 50,000 per year, they also fall under the return.
Where to find the information you need
- Statements from trading platforms (e.g. Degiro, XTB, Fio, Portu)
- PDF statements from banks
- Online portals such as Moje Daně
How much do you actually pay the state?
The standard income tax rate is 15 %. But if your annual tax base (from all income) exceeds the threshold of CZK 1,676,052 (for 2025), everything above this amount is taxed at the higher rate of 23 %.
Tips for managing taxes efficiently
- Keep clear records of every transaction.
- Follow tax news – e.g. via the Tax Administration website or tax advisors.
- Get advice from a tax advisor.
The taxation of investments is often perceived as a complicated and off-putting matter – and that is exactly what can needlessly discourage many new investors from taking the first step. The truth, however, is different: when the topic is given appropriate attention, there is no reason to panic. It is important not to neglect your own awareness, not to follow random advice from the internet, and not to be afraid to turn to an expert. At the end of the day, it is precisely each investor's personal responsibility to keep their investments – and the taxes that go with them – in order.
A small but important note
Platforms such as Portu, Zonky or InvestBay will always provide you with the necessary documents and statements that serve as the basis for your tax return. However, we do not provide tax advice itself – and the same goes for all the platforms mentioned.
If you have a more complicated situation (e.g. multiple foreign investments, a combination of various types of income or larger amounts), it pays to turn to a tax advisor. They will help you fill in the return correctly and make sure you pay only what you really have to.
If you combine several types of income, use foreign investment platforms or move into the higher 23 % rate, we also recommend turning to a tax advisor. An expert will help you not only with the return, but also with optimizing your tax liability.
Take control of your returns – start smart with InvestBay
Want an overview, a return and peace of mind? Try InvestBay – micro-investments in real estate, where we take care of everything for you. With every project you will also see an estimate of the tax impact. No hidden taxes, no surprises.
👉 Register for free at InvestBay.com
You often ask
When do investments have to be taxed?
As soon as you realize a profit (e.g. sell stocks at a profit), you must include it in your tax return – unless it is exempt, that is. Read detailed information about the tax exemption of an investment above in the article.
How are profits from investments taxed?
Profits are taxed within the tax return as other income or capital income. The tax rate is 15 % (up to 23 % for higher incomes).
How to avoid taxing stocks?
You have two options:
- Either hold them for more than 3 years, or
- stay within the annual limit of CZK 100,000 in income from the sale of securities.
Then the returns are exempt.
How are investment funds taxed?
It depends on the type and the holding period. If you hold the units for more than 3 years, the return is exempt. Otherwise you tax the profit upon redemption.
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