Obligations of accommodation providers

The General Financial Directorate has issued updated information on the tax assessment of obligations of accommodation providers. The information reflects legislative changes to VAT, personal income taxes and real estate taxes that are effective from January 2023.

The tax administration commented on the difference between accommodation services and the rental of real estate from the VAT point of view. Further, for the purposes of personal income taxes it is important to determine whether the providing of accommodation fulfils the conditions to be characterised as the conduct of business or not. If it does, then the income derived therefrom is subject to tax as income from independent activity, and the provider can use the expenses actually incurred or lump-sum expenses, depending on whether they have the necessary respective trade licence. The lessor can even enter the lump-sum regime and subject the income to a lump-sum tax. If a legal entity provides accommodation services, then the income derived from such services should be recorded in their corporate income tax return. If real estate is used for providing accommodation services, the said real estate shall be subject to the respective real estate tax rate determined for the conducting of business (namely, CZK 10 per square metre of built-up or floor area).