Income earned from prostitution must be subject to income tax, according to a new ruling by the Czech Republic’s Supreme Administrative Court.
The decision establishes a key legal precedent, clarifying that voluntary sex work constitutes taxable income under national law.
The case originated when the tax authorities ordered a woman working in the sex industry to pay back taxes on her earnings.
She challenged the decision, arguing that her income came from activities “contrary to public morality” and therefore should not be taxed. The Regional Court initially sided with her, ruling that prostitution falls outside the scope of taxable income because it is incompatible with public ethics.
However, the Supreme Administrative Court overturned that ruling, emphasizing that Czech tax law is based on the principle that all income is taxable unless explicitly exempted by statute.
The judges noted that prostitution, while not formally regulated, is also not criminalized in Czechia. Since voluntary sex work does not constitute a criminal offense, the Court concluded that its proceeds cannot be automatically excluded from taxation.
In its decision, the Court stated that “moral considerations alone cannot determine tax liability,” sending the case back to the lower court for reconsideration in light of its new legal interpretation.
The judgment effectively confirms that individuals engaged in sex work must declare their earnings and pay income tax, similar to those in other professions.
Legal experts say the ruling could have wide-ranging implications, forcing both tax authorities and workers in the sex industry to adjust to the clarified legal framework.
