New regulation DAC 7: Tax implications

Dear Car Providers,   

We would like to inform you on an upcoming change.  Income from the provision of cars via the HoppyGo platform may be subject to personal income tax pursuant to Act No. 586/1992 Coll., on Income Tax (hereinafter referred to as the “Income Tax Act”).

Income from car rental must first be classified into the correct category of income, which may be, depending on the circumstances:  

  1. income from self-employment (business), 
  1. rental income, 
  1. other income (if it is neither business income nor rental income). 

1 – This is business income where the car is included in the business assets of the business (i.e. it is accounted for) or where the car is rented out in the course of the business (e.g. in the course of a trade). The taxable amount is the income from the rental of the car less either; 
(i) the expenses demonstrably incurred in obtaining, securing and maintaining it (e.g. depreciation of the vehicle, repair and maintenance costs or HoppyGo commissions) or  
(ii) a lump sum expense, which may be 30% (max. CZK 600,000 per annum) to 60% (max. CZK 1,200,000 per annum) of the income earned, depending on the circumstances. 
In addition, such income is subject to health insurance premiums and may also be subject to social security contributions.  

2 – Rental income is income from renting the vehicle out if the rental is not part of the business but is not just an occasional rental. The taxable amount is the income less either; 
(i) the expenses demonstrably incurred in achieving, securing and maintaining it, or  
(ii) a flat-rate expense of 30% of the income (max. CZK 600,000 per year).  

3 – Other income is in the case of occasional rentals. The term “occasional” is not further defined by the law and is based on the circumstances, in particular the number of rentals in a year and the duration of the offer of the vehicle on the platform. If the total of all occasional income in a year does not exceed CZK 30,000, this income is exempt from tax. If the cumulative amount is more than CZK 30,000, the taxable income is the income less the related actual expenses (no lump sum is applicable).   

In case of doubt, we recommend that you consult your tax advisor about the tax, social security and health insurance implications of renting your vehicle. This email is not legal advice. Any liability of HoppyGo arising from the information provided is excluded. The information is not subject to regular updating and may not be in accordance with current and effective legislation.  

Prepared in collaboration with a reputable tax advisor. 

What is HoppyGo? 

HoppyGo is a car sharing platform that connects those who want to rent a car occasionally with car owners who do not use their cars on a daily basis. Users can thus use cars that would otherwise be parked in parking lots. On the other hand, owners can solve the costs of owning a car in this way or secure a side income. 

The platform includes over 1500 cars of all categories and brands. As a user, you have the opportunity to choose between luxury and affordable cars, sports cars, vans and camper vans, family cars or city cars. In short, you will find everything here.