The value test, similar to the holding period test, is a condition for the exemption of income from the sale of securities from personal income tax. Unlike the holding period test, which tracks the length of ownership, the value test focuses on the total volume of income from sales. According to the Income Tax Act, income from the sale of securities (which did not meet the three-year holding period test) is exempt from tax if the total amount for one taxpayer within one taxable period does not exceed CZK 100,000.
This limit applies to the sum of all income from the sale of securities within a given year, not the profit. Therefore, if an investor sells some stocks for CZK 90,000 and others for CZK 20,000, their total income is CZK 110,000. By doing so, they have exceeded the set limit and must pay tax on the entire related profit (the difference between the sale and purchase price), not just the amount exceeding the limit. The value test thus represents an important threshold for small and occasional investors, who must carefully monitor the volume of their annual sales to avoid tax liability.
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