Czech Court Rules Prostitution Income Must Be Taxed

The Czech Republic’s Supreme Administrative Court has ruled that money earned through voluntary prostitution should be treated as taxable income, marking a significant clarification in an area long seen as legally ambiguous.

The court’s decision overturns an earlier ruling by the Regional Court in Ostrava, which had rejected an attempt by the tax authorities to collect roughly CZK 1.8 million from a woman over a two-year period. That lower court had argued such earnings could not be taxed because they might be considered immoral or derived from unlawful activity.

In contrast, the higher court found no basis in current legislation to exempt prostitution from tax obligations. It noted that the country’s income-tax framework is built on the principle that all income is taxable unless the law specifically excludes it — and no such exclusion exists for prostitution.

The judgment also distinguishes between voluntary sex work and criminal offences such as trafficking, sexual coercion, or pimping. While those associated crimes are punishable, consensual prostitution between adults is neither banned nor formally regulated in the Czech Republic.

The court further observed that international agreements designed to combat the exploitation of people in prostitution, such as the 1949 United Nations convention, do not prohibit governments from taxing income that individuals earn from consensual sex work.

As a result, the case has been sent back to the regional court, which must now reconsider the matter under the new legal interpretation. The ruling does not legalise the prostitution industry or change criminal laws; it simply clarifies that individuals who earn income through voluntary sex work are not exempt from taxation.

While prostitution in the Czech Republic remains a grey area — tolerated but unregulated — this latest decision makes clear that its financial proceeds fall within the reach of the tax authorities. The outcome could prompt future debate on whether a clearer regulatory framework is needed for one of the country’s most persistent informal sectors.