In a memorandum released in August 2021, the Bureau of Internal Revenue (BIR) reminded those earning from creating online content to pay the social media influencers tax.
The notice came after BIR had received reports that these individuals have not been paying their taxes or have not registered with the bureau despite making a living out of what they do. Others have also yet to register with the bureau or have failed to declare their social media business all this time. Here’s a quick rundown.
Who these social media influencers are
Under the Revenue Memorandum Circular No. 97-2021, also known as the Taxation of Any Income Received by Social Media Influencers, these individuals are defined as individual or corporate taxpayers receiving income from social media platforms. They may be bloggers, video bloggers (also known as vloggers), or in general, influencers, including resident aliens who derive their income from Philippine-based content.
Income here likewise includes both cash or in-kind, while platforms cover the following: Youtube; Facebook; Instagram; Twitter; TikTok; Reddit; and Snapchat. Although, this list can go on.
Social media influencers tax: What they have to pay
According to the BIR, social media influencers qualify for both Income Tax and Business Tax. Under the former, these people would be categorised as self-employed individuals or persons engaged in trade or business as sole proprietors using the following sources:
- YouTube Partner Program
- Sponsored social and blog posts
- Display advertising
- Becoming a brand representative or ambassador
- Affiliate marketing
- Co-creating product lines
- Promoting own products
- Photo and video sales
- Digital courses, subscriptions, and e-books
- Podcasts and webinars
Social media influencers must pay for Business Tax, which is either percentage or value-added tax following certain conditions.
The liabilities of failing to comply with tax payments
BIR has warned of conducting a full-blown investigation on those who failed to comply with the social media influencers tax requirement.
Once caught attempting to evade tax payment, influencers will face a fine of ₱500,000 to ₱10,000,000. They may also be imprisoned for six to 10 years. Meanwhile, failure to file return, supply correct and accurate information, withhold or remit taxes withheld, or refund excess taxes withheld on compensation will be required to pay a fine of at least ₱10,000 and up to 10 years imprisonment. These are on top of existing tax penalties as per Philippine law.
You can view the full BIR memorandum here.
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