The Czech tax authorities are increasingly turning their attention to digital business models. Platforms such as OnlyFans and conspicuous e-shops are in the spotlight of the authorities due to potential tax shortfalls. Those affected are primarily content creators and operators whose income is declared unclearly.
The online platform OnlyFans, known above all for erotic content, also generates enormous sums in the Czech Republic. According to the operators, Czech “content creators” earned more than half a billion crowns last year.
According to a report by the Czech news broadcaster ČT24, so-called agencies are currently particularly in the focus of the tax authorities. These not only manage accounts for producers of photos and videos but often also handle communication with paying subscribers. Outwardly, they declare their activity as a “marketing service”. What is notable, however, is that many of these companies report losses – even though they apparently receive large sums from the creators.
Legally speaking, a contract exists only between the platform and the individual content creators. These then pass on part of their earnings to the agencies. For the tax authorities, this is a risky grey area, as the structures can easily be obscured.
According to the tax administration, around 30 individual audits are currently underway against people who may have declared their income incorrectly. Legally, this is regarded as income from self-employment.
A similar pattern is observed by tax investigators with ride-hailing services such as Uber: here, so-called fleet companies handle the dealings with the platform and retain part of the revenue. Unlike with OnlyFans, however, there is a direct contractual framework between platform and driver. In both cases, however, the issue is potential tax shortfalls running into millions.
New focus: e-shops
Alongside the erotic industry, the authority is also targeting online retail. In just a first round of audits at the end of August, nearly three-quarters of a billion crowns in untaxed revenue were uncovered. Particularly in focus are shops that do not report their income at all or fail to register as VAT payers as required.
Tax advisors recommend operators voluntarily report any omissions while the authorities have not yet taken action. Those who wait until an audit arrives risk not only back payments but also substantial interest and – in serious cases – criminal proceedings.
