After its public warning, BIR announced it would investigate its first list of social media influencers for tax compliance.
“We will do the investigation so that they would pay the necessary corresponding tax on their earnings,” said BIR Deputy Commissioner Arnel Guballa.
Department of Finance (DOH) categorizes social media influencers as self-employed persons engaged in trade or business as sole proprietors.
BIR’s recent memorandum issued last month stated that their earnings are generally considered as business income.
Furthermore, BIR has the authority to obtain information from foreign tax authorities under the Exchange of Information (EOI) provision of the relevant tax treaties. Thus, the bureau can rely on the data provided by its treaty partners to establish the influencer’s tax liability.
Overall, social media influencers are liable for income tax and value-added tax, and business tax.
Based on its issuance on the Circular, BIR taxes social media influencers earning income from the following sources:
- YouTube Partner Program
- sponsored social and blog posts
- display advertising
- becoming a brand representative/ambassador
- affiliate marketing
- co-creating product lines
- promoting own products
- photo and video sales
- digital courses, subscriptions, e-books
- podcasts and webinars
BIR warns that evading the tax payment or failing to make a tax return and provide truthful information to pay tax will be criminally liable under the Tax Code.