What You’ll Learn in This Article

• The legal difference between rental and accommodation services

• When rental becomes a business activity

• The obligations of an accommodation service provider

• Penalties for unauthorized business activities

Expert Explanation

The Civil Code defines rental as granting a thing (e.g., an apartment) for temporary use for a fee. A short-term rental – such as a week-long stay – is still legally a rental if it only involves providing the space without additional services.
However, once the landlord starts providing hotel-like services (cleaning during the stay, regular linen changes, meals, reception, organizing activities), the arrangement becomes an accommodation service. This is no longer passive rental under Section 2201 of the Civil Code but a business activity under the Trade Licensing Act.

According to the Trade Licensing Act, accommodation services are considered an unregulated trade, so no special professional qualifications are needed, but you must register with the Trade Licensing Office. Additional obligations apply, such as guest record-keeping, reporting foreign guests, safety regulations, and – depending on income – VAT registration.

Unauthorized business activity can result in fines from the Trade Licensing Office, additional tax assessments, and penalties from the tax authority. For foreign guests, there may also be sanctions from the Foreign Police if guest reporting obligations are not met.

Example from Practice

A Prague apartment owner rented through Airbnb and provided guests with daily cleaning, breakfast, and sightseeing tips. The tax authority and the Trade Licensing Office classified her activity as an accommodation service without a license. The result: a fine, back taxes, and the obligation to retrospectively pay VAT on her income.

You Might Be Thinking…

“Is it enough if I just don’t change the sheets or do cleaning?” The rule isn’t that simple – authorities assess the overall nature of the service, not just individual actions.

Lawyer’s Recommendation

If you plan to offer short-term rentals publicly, get a legal assessment to determine whether your activity already qualifies as a business. This will help you avoid high fines and unnecessary disputes with authorities.