BIR to Tax Youtubers, Influencers, Tiktokers and other Online Earners in New Circular


The Bureau of Internal Revenue or BIR will require Youtubers, Tiktokers, Influencers, Vloggers and other online or social media earners in their new released circular 97-2021. It is said that several vloggers and personalities who earned online did not properly pay their taxes.


BIR defines social media influencers as “all 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.”

In a nutshell, anything that involves the digital economy–regardless if you are an influencer, YouTuber, or a casual vlogger who earns from making videos––is subject to tax according to the definitions of BIR.

As for the computation of the tax, those who do not exceed the VAT threshold of Php 3,000,000 are subjected to an 8% tax “on gross sales or gross receipts and other non-operating income in excess of Php 250,000.” Like with anything that is taxable, BIR stated that common business expenses–like equipment, communication expenses, and business expenses, can be deducted from their gross income.


"Section 23 of the NIRC, as amended, provides that a citizen of the Philippines residing therein and domestic corporations shall be taxable on all income derived from sources within and without the Philippines, while a non'resident citizen, resident, non-resident alien, and resident foreign corporations shall be taxable on income derived from sources within the Philippines. Social media influencers other than corporations and partnerships are classified for tax purposes as self-employed individuals or persons engaged in trade or business as sole proprietors, and therefore, their income is generally considered business income. Social media influencers derive their income from the following sources: YouTube Partner Program - this allows an influencer to make money from; a) Advertising revenue - the influencer gets ad revenue from display, overlay, and video ads. b) Channel membership - the influencer makes recurring nlonthly payments in exchange for special perks that he/she/it offers. c) Merch shelf - followers can browse and buy official branded merchandise from the influencer's watch pages. d) Super Chat and Super Stickers - followers pay to get their messages highlighted in chat streams. e) YouTube Premium Revenue - the influencer gets a part of a YouTube Premium subscriber's subscription fee when followers watch his/herlits contents. I Republic Act (RA) No. 10963, or the Tax Reform for Acceleration and Inclusion (TRAfN) Act, exempts from income tax individual taxpayers earning a taxable annual income not exceeding P250,000.00. 2 R.A. No. 9178, or the Barangay Micro Business Enterprises (BMBEs) Actof 2002, incentives, including income tax exemption, are available tp BMBEs. , 3 Those with gross revenues not exceeding P3 Million a year are exempt from VAT. They are, however, liable to percentage tax. U il G \;,' ffiEJ!$f 11. 111. sponsored social and blog posts - an influencer features a product or concept he/she/it is paid to promote. display advertising - influencers also have the ability to earn money passively through display advertising. Here, the ad is similar to radio commercials because it interrupts the program. becoming a brand representative/ambassador - the influencer would promote the products on his/her/its social media account in exchange for free products from the brand. Some brands may pay an additional fee for every piece of content or conversion the influencer creates or drives. affiliate marketing - In this type of alrangement, an affiliate marketer for the brand or the influencer would be provided with a unique link or code that will be used for tracking his/her conversions. For every conversion resulting from the said link or code, the influencer will eam a commission. co-creating product lines - a brand would partner with an influencer to co-create products for their brand and the latter, in tum, gets paid based on a certain percentage of the profits. promoting own products - the influencer may come up with his/her own line of products. photo and video sales - influencers may create and sell frame-worthy pictures, high-quality videos, or the rights over them as well. digital courses, subscriptions, e-books - influencers sell digital products. podcasts and webinars - these may include sponsored ads that generate money or the influencer may charge a small fee to access the content. tv. vl. vll. vlll. V. ix. x. To constitute gains or profits from the conduct of trade or business, the payments must be received by a social media influencer in consideration for services rendered or to be rendered, irrespective of the manner or form of payment. Therefore, if a social media influencer receives free products in exchange for the promotion thereof on his/her/it YouTube channel or other social media accounts, he/she/it must declare the fair market value of such products as income. "


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