Czech Business Today

Online platforms became an issue of communal elections which will take place in the Czech Republic this autumn. The society agrees there is a need to regulate the sector but at the same time it should not hinder its development.

The questions is on which issue the regulation should focus: better consumer protection, taxation, noise, parity of business conditions for online and offline businesses, etc. In the Czech Republic, there are already laws that regulate this business but the problem is with the control and enforcement. Last October, the financial administration issued a clear methodology regarding the tax obligations of those providing accommodation through Internet platforms but the competent authorities do not have sufficient information and better cooperation with online platforms on data sharing is needed. The traditional businesses request the same control and same obligations for the online platforms. We need a clear distinction between a regular business and occasional renting.

The European Commission commissioned a study across the EU to see what kind of regulatory practices exist. The Commission does not want to regulate the online platforms at EU level and leaves this competence up to the Member States but provides them with some guidance. The practice shows there is a need to find an appropriate regulation locally due to the differences in the businesses in tourist hotspots and those in rural areas. The concept of a sharing economy should not be destroyed but it is important to draw the line where the occasional revenue starts to be a real business. To draft the definition is a “casse-tête” but it is very important in order to allow this new business model to develop and at the same time ensure that the traditional businesses can compete and survive.