The recent decision of the Municipal Court in Prague relating to short-term rentals has stirred up discussions throughout the professional community and attracted considerable attention of the press. In our opinion, however, there were no real reasons for this.
The Municipal Court in Prague has recently upheld the long-standing opinion of the Czech tax administration, issued in 2017, that the income of providers of short-term rentals via the Airbnb platform (but the same argument may be made for Booking.com and other similar platforms) may, under certain circumstances, be regarded as a business income, not as a rental income, and should be taxed as a regular business activity. Although the judgment was rendered by a court of first instance only, the Supreme Administrative Court would be very likely to uphold the decision (if the plaintiff appealed against it) in our opinion.
Source Baker & McKenzie
