Valuation of Equity Interest for Tax Purposes: Professional Valuation or Expert Appraisal?

In our previous article, Impact of Changes on Taxation of Income from the Sale of Shares and Equity Interests from 2025, we examined whether a formal expert appraisal or a professional valuation is required to determine the value of an equity interest. We submitted a query to the Ministry of Finance and have received a response.

So what is the answer?

Contents

• 1. Obligation to Use a Court-Appointed Expert -- NO
• 2. Option to Use Another Qualified Professional -- YES
• 3. Burden of Proof
• 4. Summary

1. Obligation to Use a Court-Appointed Expert -- NO

According to Section 10(9)(a) of the Income Tax Act, tax entities are not expressly required to obtain an expert appraisal when determining the market value of an equity interest.

However, the Property Valuation Act (No. 151/1997 Coll.) is applicable in this area, meaning that the valuation should comply with this act, but a formal expert appraisal is not mandatory.

2. Option to Use Another Qualified Professional -- YES

The law allows the valuation to be performed by another qualified professional who holds authorization under the Trade Licensing Act. This person does not have to be a court-appointed expert but must be able to demonstrate their authorization to perform property valuations.

3. Burden of Proof

The tax entity (e.g., a legal or natural person filing a tax return) is obliged to prove the correctness of their tax claim under Section 92 of the Tax Code. This means that if the tax administrator requests documentation of the equity interest's value, the entity must provide sufficient evidence.

An expert appraisal is not necessarily mandatory, but if the tax administrator questions the credibility of a valuation performed by another professional, the expert appraisal may be considered more appropriate or stronger evidence. However, we note that the tax administrator may also question the credibility of an expert appraisal.

4. Summary

The valuation of an equity interest does not always have to be performed by a court-appointed expert, provided the valuation is carried out by a qualified professional with authorization under the Trade Licensing Act.

However, the tax entity bears the risk of having to prove the correctness of the valuation, and an expert appraisal may serve as stronger evidence in this regard.

Therefore, if you want to minimize the risk of a dispute with the tax authority, we recommend that all valuations -- whether a professional valuation or an expert appraisal -- be carefully substantiated and well-argued. Proper justification of the valuation methodology and the input data used can be crucial in the event of an audit or dispute with the tax administrator.

This will not only ensure greater credibility of the valuation but also reduce the likelihood that the tax administrator will request additional evidence or require an expert appraisal retroactively.

If you have any questions, do not hesitate to schedule a non-binding meeting with Josef Krejci, our business valuation specialist.