Updated 30.10.2024
Accommodation platforms: Airbnb, Booking and others
If you offer your properties on these platforms, you are not letting property, but providing accommodation services.
The Financial Administration has commented on this several times, and there is no doubt that, during an inspection, treating accommodation services as rental will not wash. 🙂 Tax offices also randomly check people whose accounts received payments from Airbnb or Booking. If you are considering leaving this “extra income” out of your return altogether, I strongly advise against it.
Do I need to register a trade?
In this case, I would strongly recommend registering a trade . You will also have to pay health-insurance and social-security contributions on this income. Essentially, this type of accommodation is a comprehensive business activity, as though you were running a “mini hotel”.
From an income tax perspective
Accommodation services are ordinary self-employed activity under Section 7 of the Income Tax Act. The law allows you to claim actual or lump-sum expenses.
As with rental, I would recommend keeping receipts for expenses connected with these properties (repairs, furnishings, cleaning, management, laundry, toiletries, etc.). At year-end, you can decide whether actual or lump-sum expenses are more advantageous in your tax return. If you have registered a trade for the business, lump-sum expenses amount to 60% of income.
Your income then comprises all accommodation payments received, including fees for Airbnb or Booking. In my own experience, letting through these platforms involves fairly complex administration. For this specific income, I recommend finding a suitable accountant who can, for example, retrieve the necessary data from Booking or Airbnb herself.
Accommodation services and VAT
Accommodation services are not VAT-exempt, so it is important to monitor your income over the last 12 months. Remember that this includes all income from independent activity, including VAT-exempt income (traditional rental). Once you become a VAT payer , you will have new obligations and will additionally pay 12% VAT on your accommodation services.
Be aware that Airbnb and Booking are both foreign companies from which you purchase services: as soon as you receive a service, you become a VAT-identified person. For Airbnb, this is the first fee offset against your first bank payment. For Booking, it is the first invoice sent for the preceding month. Remember that you must pay 21% VAT on these fees in the Czech Republic. If you claim actual expenses, you can subsequently claim this VAT as a tax expense. This fact, together with higher accounting costs, should influence your pricing.
Providing accommodation through booking platforms instead of long-term rental may seem more profitable, and in many cases it is. However, it is very important to consider the associated expenses: more administration, health-insurance and social-security contributions, and VAT. That is before considering that you are effectively running a “mini hotel”. Intermediary companies can help here, managing accommodation for a commission. If you are unsure, do not hesitate to get in touch and we will look at it together. 🙂