WHAT YOU’LL LEARN IN THIS ARTICLE

• when rental income is taxed under Section 9 of the Czech Income Tax Act,

• the difference between regular rental and business activity,

• what you can deduct as expenses (flat-rate vs. actual costs),

• how and when to file your tax return,

• risks of undeclared rental income,

• legal tips and a real-life example.

⚖️ LEGAL EXPLANATION

Rental Income under Section 9

If you’re renting out real estate (such as a flat or house), this usually falls under Section 9 of the Czech Income Tax Act – income from letting property. This applies to both individuals and legal entities unless the rental qualifies as business activity.

You’re required to file a tax return if your rental income exceeds the minimum threshold (currently CZK 20,000 as a secondary income – subject to legislative updates).

Expenses – Flat Rate vs. Actual

You can choose between:

• a 30% flat-rate deduction, or

• actual expenses, if you can prove them (e.g., depreciation, repairs, service charges).

For lower income, the flat rate is usually more advantageous. For higher income, actual expenses often result in a lower tax base.

Airbnb and Business Activity

Short-term rentals (like Airbnb) often cross into the realm of business activity – requiring a trade licence and being subject to social and health insurance contributions.

Risks of Undeclared Income

Tax authorities have access to various databases, including data from accommodation platforms. If you fail to declare your income, you risk tax reassessment, penalties, and fines. In serious cases, this may constitute a tax offense.

📌 REAL-LIFE EXAMPLE

A client rented out their cottage through Airbnb and didn’t consider it a business. The tax office assessed additional income tax and required back payments to the social and health insurance authorities. Thanks to timely legal help, we reduced the penalty significantly – otherwise, the client would have had to pay nearly CZK 90,000.

✅ ADVICE FROM A LAWYER

• If you’re unsure, seek advice to determine your correct tax status.

• Be careful with short-term rentals – they may seem harmless, but can shift you into business territory.

• Don’t underestimate proper recordkeeping – even an old repair invoice can lower your tax bill.