BIR reminds social media influencers, YouTubers to pay taxes

The Bureau of Internal Revenue (BIR) on Monday issued a memorandum to remind social media influencers, who are making money through online content, of their tax obligations.

The Aug. 16 memorandum, signed by BIR Commissioner Caesar Dulay, was issued to inform social media influencers of their tax obligations and the possible consequences for not paying them. 

"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 from social media platforms for tax purposes," the memorandum read.

"Whatever may be the reasons, it is now the most opportune time to discuss the tax obligations of these social media influencers," it added.

The BIR defines social media influencers as those generating income for services as bloggers and video bloggers on social media sites such as YouTube, Facebook, Instagram, Twitter, TikTok, Reddit, and Snapchat.

Social media influencers are also liable for income tax and percentage or value added tax.

The BIR also said social media influencers are classified for tax purposes as self-employed persons engaged in trade or business as sole proprietors.

Further, the bureau cited Section 23 of the National Internal Revenue Code of 1997, which indicates that "citizens of the Philippines residing therein and domestic corporations shall be taxable on all income derived from sources within and without the Philippines."

Apart from income tax, BIR said online content creators are also liable for business tax.

"Self-employed individuals whose gross sales or gross receipts and other non-operating income do not exceed the VAT threshold of P3,000,000 shall have the option to avail of the 8% tax on gross sales or gross receipts and other non-operating income," said BIR.

Meanwhile, social media influencers are allowed to deduct all ordinary and necessary expenses paid during the taxable year. These include development, management, operation and conduct of the trade, business or exercise of profession.

For example, YouTubers may deduct the expenses from their gross income including film expenses, computer equipment, subscription and software licensing fees, internet and communication expenses, and office supplies, among others.

Punishment for failure to pay taxes

Those who do not pay taxes will be liable for attempting to evade or defeat tax, which imposes a fine of P500,000 to P10 million and detention of not less than six years but not more than 10 years.

Failure to pay taxes may also be a violation of Section 255 of NIRC, which imposes at least P10,000 fine and imprisonment of not less than one year but not more than 10 years.

Aside from this, the BIR also advised its offices to conduct "full-blown tax investigation" against social media influencers residing within their respective jurisdictions. — Consuelo Marquez/BM, GMA News