Short-term rentals through platforms like Airbnb and Booking.com have become increasingly popular. However, many property owners are unaware of their legal and tax obligations. In this article, we’ll cover essential information about business licenses, tax obligations, and other duties for landlords renting out properties to guests via these platforms.
Legal Status of Short-Term Rentals
When renting out a property through platforms such as Airbnb or Booking.com, the rental is considered an accommodation service. This includes cases where the host provides additional services like cleaning, changing linens, or offering meals. It’s not the same as a traditional lease or rental agreement.
Both platforms emphasize that they act only as intermediaries, and the contractual relationship is between the guest and the host. The host is responsible for ensuring compliance with all tax and legal obligations.
Business License Requirements
Since short-term accommodation is a service, it is considered business income. This means it is subject to income tax and social and health insurance contributions, just like any other business income. To legally rent out your property regularly, you must register for a business license for accommodation services. This is a free trade license, and you must notify the trade office before starting your rental activity.
Guest Logbook
Hosts must keep a guest logbook with details about each foreign guest. This record can be in the form of a physical logbook or a digital document, organized chronologically, and must include:
Guest’s full name
Date of birth
Nationality
Passport number
Arrival and departure dates
Important: The guest log must be kept for 6 years from the last entry. Police may request to inspect this logbook at any time.
Reporting Foreign Guests
The law requires hosts to report the accommodation of foreign nationals. Hosts are required to report any foreign guests to the police within three business days of check-in.
You can report foreign guests to the police using one of the following methods:
By submitting a registration form
By submitting a document with the same details (e.g., passport, residence permit)
Electronically (recommended option)
Tip: The registration form must be signed. You can either provide a physical signature or use an electronic signature.
To report foreign guests online, hosts must register for an IDUB (Accommodation Facility Identifier) and use the Ubyport app for reporting. Ubyport should be replaced by e-Turista probably by 2026.
City Tax – Resort and Spa Fees
According to Act No. 565/1990 Coll., resort and spa fees must be collected for guests who are staying for recreation or medical treatments. This fee does not apply to business travellers. A signed declaration from the guest confirming their business trip can exempt them from paying this fee.
Exemptions include:
Individuals under 18 and over 70
Disabled individuals with specific medical cards (ZTP/P) and their guides
Soldiers in mandatory service
Fees vary by municipality but typically range around 15 CZK per person per day. Hosts are responsible for paying and reporting these fees.
Income Tax and Mandatory Insurance
If you are renting your property through Airbnb or Booking.com, the income is treated as business income and is subject to personal income tax as well as mandatory social and health insurance.
VAT (Value Added Tax)
Income from accommodation services also counts toward the mandatory VAT registration threshold. If your income from accommodation exceeds 2 million CZK in a calendar year, you are required to register for VAT as a full VAT payer.
Moreover, you must register as a VAT Identified Person. If you purchase services from a company registered in another EU country (e.g. commissions from Airbnb or Booking), you are required to register and report these transactions. Moreover, you are obliged to pay VAT from such services in the CR. As a VAT identified person you do not have a right to VAT deduction.
By understanding and fulfilling your obligations, you can avoid penalties and ensure your short-term rental business runs smoothly.
For more guidance or if you’re unsure about your responsibilities, feel free to contact us for professional advice.