No licence is needed. A purchase-linked competition is a promotional competition expressly excluded by gambling law, provided it promotes sales, is not a separate business and requires no stake; payment for goods is not a stake. The rules are a consumer contract with corresponding requirements. For tax, the organiser withholds tax on cash prizes; winners declare non-cash prizes, while prizes within the statutory limit are exempt. Czech promotional competitions without a stake likewise require no licence.
Organisers of “buy and win” competitions fear gambling regulation most. In fact, licensing is the smallest concern because promotional competitions are expressly excluded. Two other matters are often underestimated: well-written rules and prize taxation.
Why a purchase-linked competition is not gambling
Promotional competitions are not considered gambling where they are not an independent business activity, serve only to promote sales of goods and services, and participation does not require payment of a stake under this Act. […] Payments made to enter a competition or obtain supplies from the promotional competition organiser or prize provider are not considered stakes under this Act.
— Section 4(6) of Act No. 30/2019 Coll. (unofficial English translation)
A purchase requirement is expressly permitted, as is drawing lots: the Act directly envisages random selection of winners. As long as the competition promotes your goods or services and is not a separate business, no licence or authority notification is needed. Czech law reaches the same result from the opposite direction: gambling requires a stake (Section 3 of Act No. 186/2016 Coll.), and buying goods at their usual price is not a stake. An ordinary receipt-based promotion therefore needs no licence in Czechia either.
The rules are a contract
Published rules bind the organiser, so include everything you will later need: organiser and prize provider identities; separate purchase and registration periods; winner selection mechanics, including jury criteria and decision dates; prize numbers and descriptions; a collection deadline running from notification to the winner rather than the competition’s end; and a reserved right to amend rules, without which they cannot be changed during the competition. Clauses such as “prizes cannot be enforced in court” or “the organiser’s decision is final and cannot be reviewed” are unfair and invalid in consumer contracts. The Slovak Trade Inspection supervises organisers under Act No. 108/2024 Coll. The rules must also provide personal data information, including retention of non-winners’ data; see personal data processing duties. If the competition accompanies a sale, see the lowest previous price rule.
Who pays tax on prizes
A prize from an advertising competition or draw is the winner’s other income under Section 8(1)(i) of Act No. 595/2003 Coll., exempt up to the statutory limit:
Prizes or winnings received, other than those under point (l), not exceeding EUR 350 per prize or winning; where such income exceeds EUR 350, only the amount above that threshold is included in the tax base […]
— Section 9(2)(m) of Act No. 595/2003 Coll. (unofficial English translation)
Only the excess is taxed. For cash prizes, the organiser withholds and remits tax on payment under Section 43 of Act No. 595/2003 Coll., leaving the winner nothing to handle. For non-cash prizes, the organiser must tell the winner the prize’s value (Section 8(10) of Act No. 595/2003 Coll.), and the winner declares the taxable excess themselves. Health insurance contributions under Act No. 580/2004 Coll. also apply to the excess. Where possible, keep each prize within the exempt band: the winner then has no obligation, and you only retain evidence of prize values. In Czechia, an individual advertising competition prize of up to CZK 50,000 is exempt. Once CZK 50,000 is exceeded, the 15% withholding tax is calculated on the entire prize, not merely the excess. The organiser generally withholds the tax, and the winner does not file a return because of it; for a non-cash prize, the rules should also specify in advance how the tax will be paid.
How we can help
Our e-commerce legal services prepare or review competition rules, selection mechanics, prize tax arrangements and personal data documents. We align them with your online shop terms to avoid contradictions. If creators promote the campaign on social media, our influencer agreement covers cooperation and labelling.
Send us the planned mechanics before launch. Rules are difficult to supplement once the competition is running, when every participant can already see the errors.
This answer provides general information on the law as at 10 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
