Important decision
The Supreme Administrative Court (SAC) ruled that income from voluntary prostitution is subject to taxation in the same way as other forms of self-employment. In this judgment, the Court confirmed that the Income Tax Act does not exclude such income from the subject of tax.
The Supreme Administrative Court’s judgment of 6 October 2025 overturned a previous decision of the Regional Court in Ostrava – Olomouc Branch, which had previously annulled a tax assessment against a person engaging in voluntary prostitution. On the contrary, the SAC upheld the arguments of the Appellate Tax Directorate that income from prostitution also falls under taxable income.
The Court emphasised that the Income Tax Act is based on the principle that all income of an individual is subject to taxation unless specifically excluded or exempted. Prostitution is not among these exemptions.
In doing so, the SAC effectively confirmed that the voluntary practice of prostitution is a legitimate economic activity that can be subject to income tax.
The SAC also rejected the equation of voluntary prostitution with criminal activity. The performance of prostitution itself is not punishable, as the Court pointed out by referring to the Constitutional Court’s ruling in Case No. Pl. ÚS 69/04.
Only its accompanying phenomena are criminal – in particular:
The Court thus distinguished consensual prostitution from activities that violate human rights or dignity. In this case, therefore, it focused only on the legal aspect – i.e. whether the state can tax income that is not generated by criminal activity. The answer was clearly yes.
The Regional Court argued that taxation of prostitution contravened the Convention for the Suppression of the Traffic in Persons and of the Exploitation of the Prostitution of Others (New York Convention, 1951). However, the Supreme Administrative Court rejected this view. It stated that the Convention prohibits the exploitation of prostitution of others, not the actual performance of prostitution.
It also pointed out that other States which are parties to the Convention (e.g. Germany, Austria or the Netherlands) do not exclude the taxation of prostitution. The Czech Republic thus follows the international trend and treats prostitution as an activity which, although socially sensitive, exists in law and is economically taxable.
In its decision, the Supreme Administrative Court stressed that its task was not to assess the moral, ethical or social impact of prostitution. The subject of the proceedings was exclusively the question of the taxation of income from the voluntary exercise of that activity.
The Court thus remained strictly within the legal framework and refused to go beyond its jurisdiction. That is, it made no judgment as to whether or not the state should regulate prostitution in other ways – for example, through licensing, health requirements, or other forms of supervision.
Yes. This judgment provides clear confirmation that voluntary prostitution is taxable income for tax law purposes.
In practice, this means that:
The judgment thus also affects the practice of the tax authorities, which now have a clear basis for assessing similar cases.
The decision of the Supreme Administrative Court represents an important precedent in Czech tax law. It confirms that the state can demand tax even on income derived from activities that are not explicitly regulated but are not criminal either.
This opens the way for a broader debate on the legislative regulation of prostitution – for example, on the possibility of introducing licensing, registration or health standards. At present, however, anyone who engages in prostitution voluntarily and without compulsion is obliged to tax their income in the same way as other businesses.
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