Leasing or tourist accommodation

The City Court in Prague 6 has issued judgement no. Af 20/2020, which will most likely influence discussions about the features of services provided via the Airbnb platform. The case concerned an owner of apartments who used the Airbnb platform for the short-term leasing of those apartments. The tax administrator opposed this and claimed that the owner actually provided "tourist accommodation". According to the court, deeming that such services constitute "leasing" is indeed incorrect. Rather, the court held that the services in question were indeed accommodation services.

Among the criteria that the court took into account to assess the nature of the services, were: 1) whether the apartments were provided for a relatively short period or for a period defined in advance as temporary, 2) whether the services were offered in such a way as to target persons who do not request housing services but rather only temporary accommodation services, 3) whether the offered price was tailored towards providing short-term accommodation (for example, as a daily price) and 4) whether other services were provided - such as cleaning and regular maintenance (over and above purely accommodation services). The court found in principle that the criteria were met by considering only two facts: the owner of the apartments offered her services via the Airbnb platform, and she had received several hundred payments over only a few months (i.e. there was a high turnover of accommodated persons).

The opinion of the City Court in Prague does not really help with unclear "threshold cases" - i.e. when some of the above-mentioned criteria are met and some are not. Nevertheless, the judgement in question is indeed important. In principle, it supports the opinion of the Financial Administration of the Czech Republic in respect of subjects using the Airbnb platform for providing services (or offering similar services in some other way), according to which such subjects are assessed for income tax, VAT and insurance payments and according to which such subjects are also bound to meet ERS (the Electronic Registration of Sales) obligations.