BIR to Vloggers and Influencers: ‘Pay your Taxes’

MANILA, Philippines — The Bureau of Internal Revenue (BIR) has started a thorough investigation into the Social Media Influencers (SMIs) who fail to pay the right taxes on their online earnings.

The Revenue Memorandum Circular (RMC) No. 97-2021 – Taxation of Any Income Received by Social Media Influencers was promulgated by the Bureau of Internal Revenue (BIR) last August 16, 2021.

In this regard, BIR Chairman Dulay said that several SMIs have been underpaying taxes on their earnings from social networking platforms. If someone refuses to settle their tax debts, they will be charged with tax evasion.

To qoute from RMC signed by Internal Revenue Commissioner Caesar Dulay:

“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, social media influencers might be self-employed persons or single proprietors engaged in trade or business. The following are the taxable sources of income were specifically mentioned by the BIR;

  • 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 BIR also clarified if the SMIs are categorized as self-employed individuals, this was subject to twelve percent (12%) value-added tax (VAT) if their yearly income exceeds P3 million and an eight percent (8%) tax if it does not below that threshold.

Similarly, as part of his or her income, the online content creator must disclosed the fair market value of the free products obtained in exchange for his or her services.

Tax Evasion

Recently, a couple who earned more than P100 million from their social media account (Youtube) had their account unexpectedly removed/deleted, which the BIR believes was a way to evade paying taxes.

According to the BIR’s initial report, the couple made between P50 million to P100 million in the past couple of years, allowing them to purchase luxury cars and establish a house somewhere in Metro Manila.

These two lovers deleted their YouTube channel days after BIR Commissioner Caesar R. Dulay declared that the social media influencers (SMIs) who have been earning money through social media platforms like as YouTube and Facebook should pay tax.

BIR’s deputy commissioner for legal group, Atty. Marissa Cabreros, said social media influencers must register with the bureau and pay their taxes.

to qoute:

“Wala ho silang dapat ikatakot. ‘Yung obligasyon po ng pagrerehistro ay magkaiba po ‘yan sa pagbabayad ng buwis. Kailangang magparehistro sila dahil they are considered engaged in business,”

“Pangalawa, when you are registered on BIR, they are required to pay taxes. Kung ang annual net income niyo po ay hindi naman lalagpas sa P250,000, wala pong babayarang income tax po ‘yan. Kaya ‘yung mga nagsasabi ng ‘maliit lang kami,’ wala po silang dapat ikatakot,”

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