Czech high court rules sex workers must declare income tax

Income earned from prostitution is subject to taxation under Czech law, the Supreme Administrative Court (NSS) ruled Tuesday.

The Financial Directorate assessed approximately CZK 1.8 million in taxes over two years on a woman who earned money through prostitution.

She challenged the decision, and the Ostrava Regional Court sided with her, ruling that income from activities contrary to good morals or criminal acts cannot be taxed.

The NSS overturned the ruling, emphasizing that all income is taxable unless specifically exempted by law.

“Income from prostitution is neither explicitly excluded nor exempted by law,” the court said, noting that the lower court had wrongly equated voluntary prostitution with criminal activity.

Prostitution is legal in Czechia, though related crimes—human trafficking, pimping, sexual coercion, and rape—remain criminalized.

Estimates from NGO Rozkoš bez rizika, which provides support and services to sex workers, suggest that approximately 13,000 women work as sex workers in the country, many of whom are Czech nationals and a significant portion of whom are single mothers.

The NSS also clarified that international agreements do not prevent taxing prostitution, a practice followed by other signatories of the New York Convention. The case will now return to the Regional Court, which must follow the NSS’s legal interpretation.

The ruling underscores the distinction between taxable income and criminalized activity: organized prostitution is prohibited, while voluntary prostitution occupies a legal gray area. The NSS decision aligns taxation policy with this framework and separates fiscal obligations from moral debate.

Across Europe, the regulation of prostitution remains contentious. A divided European Parliament report in September 2024, aiming to reduce demand and the punishment of clients, underscored the challenge of balancing human rights, worker protection, and legal enforcement.

European approaches vary: Germany and the Netherlands fully legalize sex work with registration, taxation, and labor protections; Sweden criminalizes clients but not sellers; Belgium largely decriminalizes the industry.

Italy has long left prostitution in regulatory limbo, but in April 2025 its national statistics institute formally classified sex work, allowing VAT registration and gradual formalization.

The Czech case underscores ongoing European debates on reconciling worker safety, fiscal compliance, and ethics in sex work regulation.