Municipal Court in Prague: Revenues from accommodation service providers such as Airbnb and Booking.com are taxable as business income

The Municipal Court in Prague heard a lawsuit filed by an owner of several apartments against the Tax Office. The plaintiff sought the annulment of a decision of the Tax Office, which levied a higher tax on her and forced her to file a corrective tax return. The plaintiff referred to the fact that her activity fell within the legal framework of lease and that she had duly declared the income from this activity in her tax returns.

In assessing the increased tax, the Tax Office relied mainly on statements of the plaintiff's accounts, which showed frequent and irregular income from Airbnb, on average one payment every two days. Based on this, the Tax Office concluded that the plaintiff was in fact pursuing a business activity subject to a higher tax rate.

The Court ruled in favour of the Tax Office and justified its decision mainly by referring to the case law of the Czech Constitutional Court dealing with the concept of housing, according to which "housing does not consist only in overnight stays, but in the entire complex of providing human needs in its material and mental level". The Municipal Court added that "accommodation provided through Airbnb cannot fulfil the legally intended purpose of renting an apartment, as it does not saturate the need for housing, but satisfies only the need for accommodation, and therefore it is necessary to classify it as an accommodation service under § 2326 of the Civil Code". According to the Court, Airbnb platform offers accommodation services in a way that targets people who are not looking for satisfaction of their housing needs, but only the need for temporary accommodation, the Court also mentioned that the price for providing the services is also usually tied to a short period of time. All these aspects lead to the unequivocal conclusion that the activity of the plaintiff cannot be classified as a lease but that she in fact operates accommodation services.