The Philippines’ Bureau of Internal Revenue today released a circular on taxation of any income received by bloggers, vloggers, and other online influencers in an effort to clarify their obligations.
Under Memorandum Circular No. 97-2021, those who are being paid to promote a product or service online — whether they are paid in cash or in kind — are reminded to pay taxes to the government. This, after the BIR received reports that “certain social media personalities have not been paying their income taxes despite earning huge income from the different social media platforms.”
Besides income tax, those who are into influencer marketing are also liable for business tax, which may either be percentage or value-added tax.
There are allowed deductions from gross income, among others, and they include “ordinary and necessary expenses paid or incurred during the taxable year in carrying on or which are directly attributable to, the development, management, operation and/or conduct of the trade, business or exercise of a profession.” The business expense could be the purchase of cameras, smartphones, and microphones needed for filming or laptops and desktops to be able to work online and any subscription to an internet service provider.
Alternatively, the social media influencers may choose Optional Standard Deduction — a standard deduction not exceeding 40% of gross sales or receipts in the case of individual taxpayers, or 40% of its gross income in the case of corporations.
You can see the 10-page memorandum circular below for more on this topic.
The 10-page BIR memorandum circular
In June 2020, the BIR issued RMC 60-2020 to ensure that online sellers on platforms like Lazada and Shopee and content creators like YouTubers are registered with the appropriate Revenue District Officer.
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