Kids of my generation when asked what they wanted to be when they grow up will often say to be a doctor, pilot, engineer, teacher, or nurse. The kids of this generation when asked the same question, most would want to be a YouTuber, probably because they saw the fortune made by these so-called social media influencers.
Last 16 August 2021, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular No. 97-2021 — Taxation of Any Income Received by Social Media Influencers.
“The Bureau of Internal Revenue (BIR) 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,” according to the RMC signed by Internal Revenue Commissioner Caesar Dulay.
Under the RMC, social media influencers may be defined as self-employed individuals or persons engaged in trade or business as sole proprietors. In particular, the BIR cited the following sources of income that are taxable:
- YouTube Partner Program
- Sponsored Social & Blog Posts
- Display Advertising
- Becoming a Brand Representative/Ambassador
- Affiliate Marketing
- Co-creating Product Lines
- Promoting Own Products
- Photo & Video Sales
- Digital Courses, Subscriptions, eBooks
- Podcasts and Webinars
The revenue directive also said that royalties in another country, including payments under the YouTube Partner Program, shall be included in the computation of the gross income of a social media influencer.
I spoke with someone familiar with taxation, and this is her take on this:
“The RMC clarifies the taxes that individual social media influencers must pay, including instances when they earn income outside the country. It also reminds them to register with the BIR or update their registration information, such as a new line of business or source of income, etc. Failure to comply entails penalties under the law. Since the pandemic started, many shifted to different social media platforms either to continue their business or career or engage in a new business venture. BIR wants to ensure these social media influencers who are earning a lot will also pay the proper taxes for their income and business the same way everyone does, whether income was derived here or abroad.”
In June 2020, the BIR issued RMC No. 60-2020 pertaining to the obligations of persons conducting business transactions through any form of electronic media. This latest issuance, RMC No. 97-2021 takes effect immediately. A copy of the said RMC is available from the BIR website.
What’s your take on this BIR directive? Leave your comment below.