Know Your Rights: Tax Assessment Stage
March 5, 2021
The Bureau of Internal Revenue recently issued Revenue Memorandum Circular No. 97-2021 (RMC 97-2021), clarifying the tax obligations of social media influencers in the Philippines.
As defined in the said RMC, social media influencers (“influencer”) are “taxpayers, individuals or corporations, receiving income, in cash or in kind, from any social media sites and platforms (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.”
It is a fundamental principle in our tax laws that for income to be taxable, the income they receive should constitute payment for the service they render or to be rendered. Otherwise stated, the online activity will only be taxable if they receive payment for the services they render. Examples of these activities are as follows:
1. Income from YouTube through the following.
a. Advertising revenue.
b. Channel membership.
c. Merch shelf.
d. Super Chat and Super Stickers.
e. YouTube Premium Revenue.
2. Sponsored social and blog posts.
3. Display advertising.
4. Becoming a brand representative/ambassador.
5. Affiliate marketing.
6. Co-creating product lines.
7. Promoting own products.
8. Photo and video sales.
9. Digital courses, subscriptions, and e-books.
10. Podcasts and webinars.
The said RMC also reminded the influencers of their obligations with the BIR, such as registration for tax identification number (TIN), if still unregistered, maintenance of books of accounts, and filing of tax returns and the payment thereof.
Any influencer who willfully fails to comply with the requirements above, especially the filing of tax returns and the payments of taxes, shall be held criminally and civilly liable in addition to the payment of taxes and penalties.
In order to enforce this RMC it is expected that the BIR will subject these influencers to tax audits to check if they paid taxes for the income they received in the past years.
Should you wish to know further about the said RMC taxing social media influencers, you may contact us.
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