In brief
This newsletter provides a selection of newly announced legislation and court decisions reinterpreting private law.
New legislation
The qualified employee option and its tax benefits
On 1 January 2026, an amendment to the Income Tax Act will come into force. It will bring advantages in the area of employee option plans. The new model will be particularly beneficial for start-ups and new innovative companies.
The amendment to the act introduces the concept of a qualified employee option (“Option”). If the Option meets the act’s requirements, it will qualify for the following tax benefits:
- Taxation will be deferred: The employee’s income from acquiring the Option will only be taxed on the sale of their shareholding (the “no tax before cash” rule) or 15 years after they exercise the Option.
- Income from exercising the Option — i.e., acquiring a shareholding — will not be subject to social security and health insurance contributions.
For the Option to qualify for the preferential tax treatment, the statutory conditions must be met, both for the Option and for the employer and employee.
- The Option is a nontransferable written promise entitling the employee to acquire, in the future, a business interest or share in the company of the employer or its controlling person for a pre-agreed price. The Option is granted free of charge based on a written agreement between the employer and the employee. The employee may acquire the share no earlier than three years after the promise is granted.
- The qualified employee must have been employed for at least 12 months, and their monthly salary must be at least 1.2 times the minimum wage. Their share in the employer group acquired through the Option cannot exceed 5%.
- Only companies that are not part of a group with a worldwide annual turnover over CZK 2.5 billion (EUR 100 million) and assets over CZK 2 billion (EUR 82 million) when the Option is negotiated can be a qualified employer. Large corporations and their subsidiaries cannot use this model. The advantage does not apply to banks and insurance companies, among others.
The employer must obtain an expert valuation of the shareholding’s market value, both when granting the promise and when exercising the Option. The employer must subsequently provide the tax authority and the employee with these details.
Change in the legislation on psychomodulants
The government has decided that kratom, a psychoactive substance derived from a tropical plant and most commonly used in the form of a powder dissolved in water, will be added to the list of psychomodulants with regulated sales. This change entered into effect on 12 November 2025. In small amounts, kratom is stimulating and may have medicinal effects, while, in large doses, it is a depressant. The aim of the new legislation is to ensure the controlled and safe sale of psychomodulants and to prevent their availability to persons under 18 years of age.
The handling of kratom (which includes cultivation, research, production, import, distribution, marketing, internet sales, storage and transport for others) requires a license issued by the Ministry of Health. Kratom can only be purchased from specialized outlets where persons under 18 are prohibited. Its sale in vending machines is prohibited. Goods containing kratom will be inspected and must not be placed next to foodstuffs. Customers are to receive information from sellers on the composition of kratom and recommended doses. According to the Ministry of Health’s list, kratom should be available in 17 brick-and-mortar stores that hold permits that are only valid until the end of 2025. For 2026, businesses must re-obtain a kratom permit. Unauthorized handling of kratom will be classified as a misdemeanor or a criminal offense.
Recent court decisions
Public access to the register of beneficial owners of legal persons and legal arrangements to end as of 17 December 2025
Currently, the register of beneficial owners of legal persons and legal arrangements (“Register”) is only partially freely accessible to the public. However, in the opinion of the Supreme Court and the Supreme Administrative Court, the state cannot require the registration of a beneficial owner in the Register, as doing so leads to an unjustified interference with the beneficial owner’s fundamental rights. Both courts referred to the judgment of the Court of Justice of the European Union (CJEU) in the joined cases of WM and Sovim (C-37/20 and C-601/20). These cases annulled part of the Fifth AML Directive, which required public access to information on beneficial owners. The CJEU found that unrestricted public access to beneficial owners’ data constituted a disproportionate interference with the right to privacy and data protection under articles 7 and 8 of the EU Charter. Therefore, the Ministry of Justice has decided to make the Register unavailable to the public as of 17 December 2025. Only a person who demonstrates a legitimate interest before a court can obtain information from the Register.
After 17 December 2025, the Register will remain open for the following:
- Persons recording their own data
- Privileged users with remote access, namely the following:
- Public authorities
- Persons obliged to fulfill the obligations under the AML Act — Act No. 253/2008 Coll., on certain measures against the legalization of proceeds of crime and terrorist financing
- Other entities authorized by law upon their request
(The Supreme Court’s resolution of 25 August 2025, Case No. 27 Cdo 1368/2024; the Supreme Court’s resolution of 26 August 2025, Case No. 27 Cdo 1548/2024; the Supreme Administrative Court’s judgment of 12 March 2025, Case No. 4 As 219/2024; and the Supreme Administrative Court’s judgment of 18 September 2025, Case No. 1 Afs 193/2024).