15 Sep BIR Reminds Social Media Influencers: Pay Your Taxes
On August 16, 2021, the Bureau of Internal Revenue (BIR) has released Revenue Memorandum Circular No. 97-2021 that seeks to iterate the taxation of any income received by social media influencers.
Social Media Influencers residing in the country are classified as self-employed individuals or persons engaged in trade or business as sole proprietors therefore, their income will be considered as business income. For foreigners who are present in the Philippines for at least two years, any income derived from Philippine-based contents will generally be taxable as well.
Earnings made by an influencer by working with brands are also subject to taxation. Anything related to working with brands such as affiliate marketing, becoming a brand representative/ambassador, display advertising, etc. would all be taxable in the social media influencer’s end according to the new directive. Ex-Deal arrangements, where brands send their products for free to the influencer should also be declared by the fair market value of the products they receive.
This memorandum also covers influencers who promote their own brand of merchandise or product lines, podcasts and webinars that earn through service promotions.
Taxpayers whose gross annual earnings exceed ₱3 million shall have their books of accounts audited and examined every year.
An example of an online platform that pays its creators is YouTube’s Partner Program. Influencers can earn income through advertising revenue, channel membership, merch shelf, super chat, super stickers, and YouTube Premium Revenue. As such, the top three highest paid YouTube content creators have an estimated earnings of $55.7K (₱2,807,948.40) a month. These income should be declared and are taxable as reminded by the BIR.
This is not a new law, rather, a reminder from BIR for influencers to exercise due diligence in registering, filing, declaring and paying their fair share of taxes. They created a similar memo last 2020 to address online sellers, freelancers, digital creators and bloggers that the same rule applies to them.
Taxes collected from influencers may increase the government’s revenue that will be used for the country’s economic recovery amidst the pandemic, COVID-19. The BIR aims to set a ₱2.08 trillion collection target for 2021 which is 7% higher than what they collected last year, 2020 which was ₱1.9 trillion.
You can read the full memorandum from the BIR here.
Should earnings made from social media platforms be subject to taxation?