While recognizing that social media influencers play an important part in communicating a company’s brand to the masses, the Bureau of Internal Revenues issued a memorandum “reminding” these so-called influencers to pay their taxes.
“Heavy reliance on social media influencers can be attributed to the belief of such companies that with the authority, knowledge, connection, and reputation the former have established over time, they are able to impact or affect the purchasing decisions and the way of life of their audience or followers, ” the BIR memo circular said.
The BIR further said “it has been receiving reports that certain social media influencers have not been paying their income taxes despite earning huge income from the different social media platforms. There are also reports that they are not registered with the BIR or are registered under different tax types or line of business but are also not declaring their earnings from social media platforms for tax purposes.”
“Whatever may be the reasons, it is now the most opportune time to discuss the tax obligations of these social media influencers,” the BIR said.
The tax bureau noted that the term “social media influencers” referred to the circular “includes all taxpayers, individuals or corporations, receiving income, in cash or in kind, from any social media sites and platforms” such as YouTube, Facebook, Instagram, Twitter, TikTok, Reddit, Snapchat, etc. “in exchange for services performed as bloggers, video bloggers or “vloggers” or as an influencer, in general, and from any other activities performed on such social media sites and platforms.”
The BIR said unless exempted, “social media influencers shall be liable to income tax and percentage or value-added tax.”
So who will be taxed?
The BIR said that a citizen of the Philippines “residing therein and domestic corporations shall be taxable on all income derived from sources within and without the Philippines, while a non-resident citizen, resident, non-resident alien, and resident foreign corporations shall be taxable on income derived from sources within the Philippines.”
The tax bureau further said self-employed individuals whose gross sales or gross receipts and other non-operating income do not exceed the VAT threshold of PhP3 million “shall have the option to avail of the eight percent (8%) tax on gross sales or gross receipts and other nonoperating income in excess of two hundred fifty thousand pesos (P250,000) in lieu of the graduated income tax rates.”
The BIR warned that “social Media influencers who willfully attempts to evade the payment of tax or willfully fails to make a return, to supply accurate and correct information or to pay tax shall, in addition to the payment of taxes and corresponding penalties, be liable criminally liable.”