Czech Constitutional Court rules income from voluntary prostitution must be taxed — RMF24

The Constitutional Court of the Czech Republic has ruled that income from the voluntary provision of sexual services must be taxed in the same way as income from other activities. The court also dismissed the complaints of a woman whom tax authorities ordered to pay arrears for 2013 and 2014, RMF24 reports.

Position of the Constitutional Court

In the reasoning of the ruling, Judge Jiří Přibáň emphasized that taxation applies to actual income and an increase in assets, rather than to a legal or moral assessment of how they were obtained. He also noted that collecting taxes does not mean moral approval of or state consent to a particular type of activity.

The court stated that the state's aim is the fair distribution of the tax burden and market regulation, rather than profiting from the work of other people. The ruling also states that taxing sexual services could, in the future, help strengthen the social position of people who provide them.

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Tax audit and complaint

The legal dispute began after tax authorities noticed substantial funds entering the woman's bank accounts that were not reflected in her tax returns. She explained that she had received the money from voluntarily providing sexual services and insisted that such income should not be subject to income tax.

During the hearings, the woman argued that by levying tax on such income, the state effectively becomes a pimp. The Constitutional Court disagreed with this argument. It also concluded that international conventions on combating human trafficking and the exploitation of prostitution do not preclude the taxation of voluntary prostitution.

Difference from Polish rules

RMF24 notes that different rules apply in Poland: voluntary prostitution is not a crime, but income from it is not taxed. Polish personal income tax legislation does not provide for taxation of income from actions that cannot be the subject of a legally valid contract.