Proper classification of income from renting real estate or providing accommodation services is crucial for determining tax obligations. According to Act No. 586/1992 Coll., on Income Taxes (ZDP), such income may be taxed either as income from independent activity (§ 7 ZDP) or as rental income (§ 9 ZDP).
Difference Between Accommodation Services and Rental
The main difference lies in the nature and duration of the accommodation:
Short-term accommodation (days, weeks) for recreation, student housing, or seasonal workers falls under accommodation services and is taxed as independent activity (§ 7 ZDP).
Long-term rental of an apartment or house for the purpose of providing housing for a tenant is classified as rental income (§ 9 ZDP).
Additional Distinguishing Features
| Criterion | Accommodation Services (§ 7 ZDP) | Rental (§ 9 ZDP) |
|---|---|---|
| Duration of Service | Short-term, temporary | Long-term |
| Services Provided | Additional services beyond basic ones (e.g., cleaning, breakfast) | Only essential services (utilities, waste disposal) |
| Advertising and Promotion | Offered online, flyers, billboards | Limited promotion |
| Contract Type | Accommodation contract | Lease agreement |
Practical Examples
Short-term rental via Airbnb – independent activity (§ 7 ZDP).
Renting an apartment to a student for a year – rental income (§ 9 ZDP).
Tax Implications
Accommodation services are subject to income tax as a business activity.
Rental income is taxed at a rate of 15% after deducting of actual or flat-rate expenses (up to 30%).
If you are unsure which category your income falls under, contact us for expert advice.