The Bureau of Internal Revenue (BIR) would dig deep into the world of advertising and marketing to unearth social media influencers who’re incomes large revenue with out paying taxes, the Department of Finance (DOF) stated.
Finance Undersecretary Antonette C. Tionko stated Tuesday, August 17, that the issuance of the BIR round reminding social media influencers of their tax obligations is just the start of a number of rules geared toward on-line content material creators.
BIR Commissioner Caesar R. Dulay final Monday, August 16 issued memorandum round 97-2021 that amplified the tax obligations of social media influencers and the doable penalties for not paying them.
Dulay disclosed that the tax bureau “has been receiving studies that sure social media influencers haven’t been paying their revenue taxes regardless of incomes large revenue from the totally different social media platforms.”
“There are additionally studies that they don’t seem to be registered with the BIR or are registered underneath totally different tax sorts or line of enterprise however are additionally not declaring their earnings from social media platforms for tax functions,” Dulay stated.
For this motive, Dulay believes “it’s now probably the most opportune time to talk about the tax obligations of these social media influencers.”
Tionko, who heads the DOF’s Revenue Operations Group, supported Dulay’s transfer to run after people who find themselves utilizing their appreciable social media footprints to generate revenue by means of YouTube, Facebook, Instagram, Twitter, TikTok, Reddit, and Snapchat.
“BIR just lately issued a RMC [revenue memorandum circular] on influencers requiring them to register and pay their taxes. That’s one of the measures we’re adopting as a result of that’s the sector that I don’t know in the event that they pay tax,” Tionko stated.
The preliminary part of the BIR rules on social media influencers, Tionko stated is to require them to register with the taxman to guarantee tax compliance.
The finance official additionally stated the BIR will scrutinize the companies which might be using influencer social media advertising and marketing.
“The different approach to do it’s to have a look at their counter events, to audit their counter events, like those that publicize and all that. You can see the match, that’s the best way to do it,” Tionko stated.
However, Tionko disclosed that there is no such thing as a approach but to estimate how massive is the tax leakage from social media influencers.
“Hopefully, once they register, we’ll get a quantity,” Toinko stated.
According to the BIR, social media influencers—labeled as self-employed individuals engaged in commerce or enterprise as sole proprietors—are responsible for revenue tax and share or worth added tax.
Moreover, on-line content material creators are additionally responsible for enterprise tax.
“Self-employed people whose product sales or gross receipts and different non-operating revenue don’t exceed the VAT threshold of P3,000,000 shall have the choice to avail of the 8% tax on product sales or gross receipts and different non-operating revenue,” BIR stated.
But the tax bureau additionally clarified that social media influencers are allowed to deduct all atypical and essential bills paid in the course of the taxable 12 months, like improvement, administration, operation and conduct of the commerce, enterprise or train of occupation.
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