On 1 January 2023, an amendment to Act No. 164/2013 Coll., on International Cooperation in Tax Administration and on Amendment of Other Related Acts, as amended (hereinafter referred to as the “Act on International Cooperation in Tax Administration”), entered into force. The amendment in question implements EU legislation and introduces a new reporting obligation for operators of so-called sharing economy platforms. The purpose of the new legislation is to provide the tax administrator with information about persons conducting business through digital sharing economy platforms for the purpose of their proper taxation.

A sharing economy platform means software enabling the connection of a seller with another user for the purpose of carrying out a reportable activity for that user, regardless of whether it is carried out on the basis of a contract concluded between the seller and the user, including any collection or payment of consideration in relation to that reportable activity. For the assessment of whether an internet portal constitutes a platform within the meaning of the Act, it is therefore important whether the operator offers its own reportable activities on the portal, or reportable activities of third parties. Typical examples of platforms within the meaning of the Act include, for instance, services such as Airbnb or Aukro, which enable individual users to offer rental of properties or sale of goods, respectively. On the other hand, e-shops will in most cases not be considered platforms, as their operators typically sell their own goods or services through e-shops. However, if goods or services of third parties were also offered within an e-shop (market place), such an e-shop could be considered a platform within the meaning of the Act on International Cooperation in Tax Administration.

Operators of sharing economy platforms have, as of 1 January 2023, a new reporting obligation towards the relevant tax administrator regarding transactions of third parties made through their platform. Within this obligation, platform operators should ensure in particular the following:

• notify the tax administrator that they are reporting platform operators, within 15 days from the day on which the platform operator becomes a so-called reporting platform operator (i.e. will operate a sharing economy platform and no statutory exception will apply to them);
• verify whether the carrying out of a reportable activity (e.g. provision of a service or goods, rental of property, etc.) by sellers is facilitated through its platform;
• ascertain selected data about platform users and about transactions carried out through the platform (e.g. identification data of the user or the amount of remuneration that the user received for the performance offered on the platform); and
• provide the obtained data to the relevant tax administrator.

Operators of sharing economy platforms may, for the purpose of fulfilling their obligations, require platform users to provide them with the necessary cooperation. In the event that platform users do not provide the necessary cooperation, platform operators are obliged to close the user account of such users or not to pay them remuneration for the performance provided on the platform.

It follows from the above that the Act on International Cooperation in Tax Administration brings relatively substantial changes in the area of digital sharing economy platforms.

Although the new legislation primarily concerns the operators of digital sharing economy platforms themselves, it may also have a practical impact on individual users who use these platforms to offer their services or goods.

David Svoboda

This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 12/2022 intended for members of that association.

This text was translated from Czech to English using an AI translator.