The Bureau of Internal Revenue (BIR) said it has already begun peeking at the taxes paid by 250 social media influencers whom they consider “top earners.”
Based on the BIR report to Finance Secretary Carlos Dominguez III, the Department of Finance (DOF) said on Wednesday that it has already issued Letters of Authority (LOAs) to investigate the initial 250 social media influencers with the largest revenues.
The BIR considers social media influencers who make money from their digital media posts as “self-employed individuals or persons engaged in trade or business as sole proprietors,” according to the DOF.
As such, the BIR considers income the money they receive that should be taxed under the BIR’s Revenue Memorandum Circular (RMC) No. 97-2021, released on August 16.
“We encourage them to register, and then we have the profiling of over 250 personalities. We will do the investigation so that they would pay the necessary corresponding tax on their earnings, ”BIR Deputy Commissioner Arnel Guballa said in a report to Dominguez.
Under RMC 97-2021, it is stated that social media influencers must pay income tax and percentage tax or, if possible, value-added tax (VAT), as stipulated in the National Internal Revenue Code (NIRC) and other existing laws.
In such Circular, the social media influencer is defined as earning the following:
- YouTube Partner Program
- sponsored social and blog posts
- display advertising
- becoming a brand representative/ambassador
- affiliate marketing
- co-creating product lines
- promoting own products
- photo and video sales
- digital courses, subscriptions, e-books
- podcasts and webinars
BIR looking into taxes of 250 social media influencers
The circular added that social media influencers should also declare that they are earning the free product they receive in exchange for its promotion to determine the value.
The income list includes considered royalties from abroad, plus fees under the YouTube Partner Program.
“It must be emphasized that the BIR also has the power to obtain information from foreign tax authorities pursuant to the Exchange of Information (EOI) provision of the relevant tax treaties. The BIR has the means to verify their income as it is clothed with a special power to obtain information from its treaty partners. The BIR may safely rely on the data provided by its treaty partners to establish the influencer’s tax liability,” said RMC 97-2021.
“The social media influencers are, therefore, advised to voluntary and truthfully declare their income and pay their corresponding taxes without waiting for a formal investigation to be conducted by the BIR to avoid being liable for tax evasion and for the civil penalty of fifty percent (50 percent) of the tax or of the deficiency tax,” it added.