Czech 15% vs 23% Tax Rate on Trading Income in 2026

General information about tax rules, not tax or legal advice. Rules change and every situation is different: check with a qualified adviser in your country before you file.

You had a good year on MNQ. Not a life changing year, just a year where the account finished a few hundred thousand koruna ahead of where it started, on top of the salary that already has tax taken off it every month. Then you open the daňové přiznání in spring, put the trading result in, and the tax at the bottom is bigger than 15 percent of anything you can point to.

That is the 23 percent band doing its job. Czech personal income tax has two rates, and the second one switches on automatically once your tax base for the year passes a line that moves every January. Nobody warns you when you cross it. Your broker does not know about it, your employer's payroll does not see your trading, and the first time the number appears is when you add everything together on one form.

Here is how the czech 15% vs 23% tax rate actually works for someone who trades CME futures, what counts towards the line, and the two follow on effects that cost more money than the extra eight points of tax.

Two rates, one tax base

Section 16 of the Income Tax Act (zákon č. 586/1992 Sb.) does something very simple. It takes your tax base for the year, after the non taxable parts and the deductible items have come off it, and splits it in two. The part up to the threshold is taxed at 15 percent. The part above it is taxed at 23 percent.

Two things about that sentence matter more than the percentages.

First, only the slice above the line gets the higher rate. Crossing the threshold by 50,000 CZK does not re tax your whole year at 23 percent, it taxes 50,000 CZK at 23 percent. The extra tax on that slice is 4,000 CZK, not a catastrophe. People panic about this band as if it were a cliff. It is a step.

Second, it is your tax base, singular. Not your trading base, not your salary base. Czech income tax sorts everything you earn into five categories, section 6 employment, section 7 business, section 8 capital income, section 9 rent and section 10 other income, works out a partial base for each, and then adds the partial bases into one number. The 23 percent band is applied to that total. A salary that on its own would never come near the line, plus a trading year that on its own would never come near the line, can put you over it together.

This is where the surprise comes from. The threshold is not a trader's threshold. It is a whole life threshold.

Where CME futures profit lands

The Financial Administration sets out the section 10 rules on its page on other income. The base is the income reduced by the expenses demonstrably incurred to obtain it, and there is a sentence at the end of that rule you need to read twice: if the expenses for a given kind of income exceed the income, the difference is disregarded.

Translated into trading language: a profitable year in section 10 adds to the number that is measured against the 23 percent line, and a losing year adds zero. Not a negative. Zero. There is no carry forward and no netting against your salary. We come back to what that does to a multi year record further down, because it is the part of the Czech system that hurts most and the part almost nobody plans for.

The threshold is not a fixed number

The line is defined as 36 times the average wage. The multiple is written into the act. The average wage is not: it is set every year by government decree, using the general assessment base and a conversion coefficient, and it is the same figure that drives social insurance ceilings and minimum contributions for the self employed. The decree for the coming year is normally published the previous autumn.

So the threshold moves upwards every January without any change in the law. Recent years give you the scale of it:

Tax year	Multiple of average wage	Threshold for the 23 percent band
2023	48 times	about 1,935,552 CZK
2024	36 times	about 1,582,812 CZK
2025	36 times	about 1,676,052 CZK
2026	36 times	set by the decree for 2026, check before you plan

Look at the jump between 2023 and 2024. The multiple was cut from 48 to 36 by the consolidation package that took effect on 1 January 2024, which pulled the line down by roughly 350,000 CZK in one step even though the average wage went up. That change caught a lot of people who had been comfortably under the old line for years.

For 2026 the multiple is still 36 and the average wage is whatever the decree says. Do not take a figure for the current year from a blog, this one included. Take it from the decree or from the Financial Administration's own material before you use it in a calculation, and note which year your source is talking about, because these pages get updated at different speeds.

A worked year: salary plus trading

Round numbers, one person, one year. Say the threshold for the year is 1,700,000 CZK. Adjust it to the real figure when you run your own.

You earn 95,000 CZK gross a month in an IT job. That is 1,140,000 CZK of section 6 income for the year. Since 2021 the employment base is the gross salary, no super gross, so 1,140,000 CZK goes into the total.

You also trade MNQ and MES in the evenings and finish the year 700,000 CZK up after commissions, exchange and clearing fees, the NFA fee and the cost of converting dollars back into koruny. That is 700,000 CZK of section 10 income.

Total tax base: 1,840,000 CZK. Threshold: 1,700,000 CZK. The first 1,700,000 CZK is taxed at 15 percent, which is 255,000 CZK. The remaining 140,000 CZK is taxed at 23 percent, which is 32,200 CZK. Total tax before credits: 287,200 CZK, and then the basic personal credit of 30,840 CZK comes off, along with any child credits.

The extra cost of crossing the line is the difference between 23 percent and 15 percent on 140,000 CZK. That is 11,200 CZK. Annoying, not fatal. What matters is that you can see it coming from roughly October, because by then you know your salary for the year and you know your trading result to date.

Pulling the top slice back under the line

The rates in section 16 apply to the base after the non taxable parts (nezdanitelné části základu daně) and the deductible items have been taken off. That is the lever. Contributions to recognised old age savings products, which since 2024 share a single annual ceiling covering supplementary pension savings, pension insurance, private life insurance and the long term investment product (DIP), reduce the base. So does mortgage interest, within its own limit, and so do qualifying donations.

None of that is a trading strategy. But if you are 100,000 CZK over the line in December and you were going to put money into a pension product anyway, doing it before 31 December rather than in January moves the deduction into the year where it is worth 23 percent rather than the year where it may only be worth 15. Confirm the current ceilings on the Financial Administration's general information for individuals before you rely on a number, because these limits were reworked recently.

What the 23 percent band does not touch

Two pieces of good news, and they are worth knowing precisely because the headline rate sounds worse than the reality.

Section 10 income does not carry social security or health insurance contributions. An employee pays those on the salary, the employer pays its share, and that is where it stops. Your trading result is taxed, it is not insured. Compare that with trading as a registered OSVČ under section 7, where the profit becomes an assessment base for both social and health insurance and the effective burden is a different animal entirely. For most Czech retail futures traders, staying in section 10 is not a trick, it is simply what the law says applies, and it happens to be the cheaper outcome.

There is also no phase out of the basic personal credit as your income rises. The 30,840 CZK credit is the same whether your base is 400,000 CZK or 2,400,000 CZK. The Czech system does not quietly claw back allowances at the top the way some European systems do. The 23 percent band is the whole of the progression.

The advance payment trap

Here is the effect that surprises people more than the tax itself.

Once your last known tax liability passes a threshold, section 38a puts you on advance payments (zálohy na daň) for the following year. Above 30,000 CZK of tax you pay two advances a year, each 40 percent of the last known liability, due in the middle of June and the middle of December. Above 150,000 CZK you pay four, each 25 percent, in the middle of March, June, September and December.

Read that again with a trader's eye. The advances are calculated from last year's tax, not from this year's trading. A strong year that pushed you into the 23 percent band can leave you paying quarterly instalments the following year, based on a result you may not repeat, while the market is doing something completely different.

There is an important carve out for salaried traders. If the section 6 employment part makes up more than half of your total base, you pay no advances at all, because tax is already being withheld from your pay every month. If employment is between 15 percent and half of the base, the advances are halved. Only when employment is a small part or absent do you pay them in full. So the person most exposed to the advance trap is the full time trader with no payroll, not the engineer with a side account.

If the advances are wildly out of line with reality, you can ask the tax office to set them differently or cancel them under the Tax Code. You ask in advance, with reasons and numbers. You do not simply stop paying.

The losing year problem

Now put three years together, because this is where the Czech treatment of derivatives really bites.

Year one you make 800,000 CZK. Year two you lose 600,000 CZK. Year three you make 400,000 CZK. Over the three years you are 600,000 CZK ahead, and a reasonable person would expect to be taxed on 600,000 CZK.

You are not. Year one is taxed on 800,000 CZK. Year two is taxed on zero, and the loss disappears, because within section 10 a difference where expenses exceed income is disregarded. Year three is taxed on 400,000 CZK. You pay tax on 1,200,000 CZK of income that, over the cycle, you did not keep.

That asymmetry is the single most expensive feature of the Czech system for anyone trading leveraged futures, and it has nothing to do with the 23 percent band. But the two interact: the years that push you over the threshold are exactly the years you cannot smooth with a previous drawdown. Leveraged futures can lose you more than you put into the account, and the tax system will not share that loss with you.

What you can control is the expense side within a profitable year. Commissions, exchange and clearing fees, the NFA fee and the cost of the currency conversion are tied directly to the trades and belong in the calculation. A platform licence or a data feed is more arguable, because the office can ask whether it was demonstrably incurred to obtain that specific income, so keep the invoices and be ready to explain the link. Every koruna of defensible expense reduces the slice sitting above the line, where it is worth 23 percent rather than 15.

Dates, rates and records

The deadlines are fixed by the Tax Code and they apply to the whole return, not just the trading part. For the 2025 tax year the paper deadline fell three months after year end, on 1 April 2026, extended to four months for a return filed electronically, 4 May 2026, and to six months where a tax advisor with a registered power of attorney files for you, 1 July 2026. The 2026 return follows the same pattern in 2027. Filing electronically through the tax portal buys you a free extra month, which is reason enough to do it. The current forms and the deadline wording live in the individuals section of the Financial Administration site.

For the currency, an individual who does not keep accounts can convert the year's dollar results using the unified exchange rate (jednotný kurz) that the Financial Administration publishes for each tax year, rather than picking a rate per trade. Pick one method and apply it to the whole year. Mixing a favourable rate here and a different rate there is the kind of thing that turns a simple check into a long conversation.

On records, keep the broker statements for the full year in the original currency, a summary that ties the statements to the figure on your return, and the invoices for anything you deducted. The Financial Administration does not receive a Czech certificate from a US or Dutch broker, so your file is the only evidence that exists. Under the standard limitation period the office can come back to a year for three years after the filing deadline, and longer in some situations, so three years of paperwork in a folder is the minimum sensible habit.

Planning around the line

Four practical habits, none of them clever, all of them worth more than arguing about the rate.

• Know your running total from October. Salary to date plus trading result to date tells you how close you are. The Czech tax year is the calendar year and there is no averaging across years, so December is where the decisions are.
• Time your deductible contributions. A pension or DIP contribution made on 28 December counts for that year. The same contribution on 3 January does not.
• Do not close a winning trade in December just to feel finished, and do not hold a loser into January to move a loss. Section 10 gives you nothing for the loss either way, so tax is a bad reason to touch a position that your plan says should stay or go.
• Budget for the advances. If you trade full time and your tax passes 150,000 CZK, next year starts with an instalment in March whether or not the market cooperates. Keep it in cash, not in margin.

The 23 percent band is not the problem most Czech futures traders think it is. Eight extra points on the slice above the line is a manageable, predictable cost that you can see coming months in advance. The parts that quietly cost more are the loss that vanishes and the advance schedule that lands on a year you did not choose. Both of those you can plan for, and neither of them is optional.

This article is general information about how the Czech rules are structured, not tax or legal advice. Rates, thresholds and the average wage figure change every year, and your own position depends on your residence, your other income and how you actually trade, so confirm the current numbers with the Financial Administration and take a specific case to a Czech tax advisor before you file.

czech 15% vs 23% tax rate

Educational content, not investment advice. Trading futures involves substantial risk of loss and is not suitable for every investor. Any reference to Algomyth results is hypothetical, simulated over historical data, and shown in full on the performance page; past performance does not guarantee future results.