Taxes For Social Media Influencers: How Does It Work?
Recently, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 97-021, reminding social media influencers about their tax obligations as taxation for influencers has been a hot topic over the past couple of months.
Although being a content creator is a relatively new profession, the BIR, in the first section of the memorandum, acknowledges the growth of the industry and the impact these influencers have on buyers purchasing decisions.
That said, this memo shouldn’t scare you, here’s everything you need to know about filing taxes as a social media influencer.
Do I Have To Pay Taxes As A Social Media Influencer?
The long and short answer to this question is yes: you have to pay taxes as a social media influencer.
Under the laws of any governing body, anyone who’s earning outside of employment must register and declare their income properly. Not filing your taxes in a timely manner (or failing to file them at all) could result in penalties of up to Php 50,000.
What Taxes Will I Have To Pay?
As outlined by RMC 97-2021, here are the different types of taxes that need to be filed by influencers:
The memo reminds us that a citizen of the Philippines will be taxable on all income derived from sources within and outside the Philippines. Those earning from sources such as the Youtube Partnership Program, sponsored social and blog posts, display advertising, affiliate marketing, created product lines, and etc. all fall under the definition of social media influencers and should therefore be taxed.
Besides income tax, social media influencers are also liable for business tax, falling under either Percentage Tax or Value Added Tax.
Percentage Tax is specifically for those whose gross annual income is less than Php 3 million. You pay 1% of your GROSS income quarterly. Note, however, that the Percentage Tax has only been temporarily decreased due to the CREATE Law and this will revert back to 3% after June 30, 2023.
Value Added Tax, on the other hand, are for VAT-registered individuals whose aggregate sales receipts for the past 12 months exceed the VAT threshold of Php 3,000,000.
The NIRC states that there exist allowable deductions from gross incomes. These include all the ordinary and necessary expenses paid by the business for the development, operation, management, business, or exercise of a profession.
How Can I Get Registered?
With our team of accountants and CPAs, we’ve come up with a product that provides you with a streamlined process for filing your taxes.
Anantaks is your sole partner throughout the tax filing process; helping you register your business with the BIR and comply with all their requirements. Through the plans that Anantaks offers, the service looks to bring convenience and ease into the tax filing process.
As a social media influencer, for example, you could choose one of our 4 available packages:
Anantaks Small Business Package
This was specifically made for individuals engaged in the business of being social media influencers but earning less than Php 3,000,000.
Anantaks VAT Registered Individual Package
This plan is for VAT-registered social media influencers earning upwards of Php 3,000,000 without the help of an employee.
Anantaks Small Business Outsourced Packaged
If you do have employees, then you could opt for either the Anantaks Small Business Outsourced Package or the VAT-Registered Outsourced Package. This package is specifically for those earning through social media with the help of employees. The business’s annual income, however, should not exceed Php 3,000,000.
VAT-Registered Outsourced Package
The VAT-Registered Outsourced Package is similar to the previous plan in that it was created for social media influencers with employees. The difference lies in that the VAT-Registered Outsourced Package was definitively created for those earning above Php 3,000,000.
If you’re still confused but would like to learn more, don’t hesitate to give us a call or email our customer support.