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BIR investigates initial 250 social media influencers for tax compliance

A month after its warning to social media influencers, BIR is now conducting an investigation on its initial list of influencers for tax compliance.
BIR investigates initial 250 social media influencers for tax compliance
File photo: BIR logo

Letters of Authority (LOAs) already issued

According to the Department of Finance (DOF), social media influencers earning money from their posts on digital media platforms are classified as self-employed individuals or persons engaged in trade or business as sole proprietors.

As defined under the BIR's Revenue Memorandum Circular (RMC) No. 97-2021 issued last August 16, the social media influencers' earnings are generally considered as business income.

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, RMC 97-2021 states.

To recap, the BIR mentioned that social media influencers are liable for income tax, percentage or value-added tax, and business tax. 

Social media influencers are those who generate income from the following sources based on the Circular:

  • 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

Those who "willfully attempt to evade the payment of tax or willfully fail to make a tax return, to supply accurate and correct information or to pay tax" will be held criminally liable under the Tax Code in addition to payment of taxes and corresponding penalties.

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, RMC 97-2021 says.

On Wednesday, citing a BIR report to Finance Secretary Carlos Dominguez III, the Department of Finance (DOF) said that the agency has already issued Letters of Authority (LOAs) for the conduct of the investigation to certain social media influencers found to be "top earners".

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