MANILA (UPDATED) —The Bureau of Internal Revenue on Monday issued a memorandum circular emphasizing the tax obligations of social media influencers.
The bureau said it has received reports that "certain social media influencers have not been paying their income taxes, despite earning huge income from the different social media platforms."
Some influencers are also not registered with the BIR or are registered under a different line of business and have not been declaring their earnings, it added.
Influencers may be liable for both income tax and business tax, the BIR said.
Under income tax, gains or profits received by the social media influencer or services rendered or to be rendered irrespective of the manner or form of payment are included, according to the bureau.
"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," the BIR said.
"Income treated as royalties in another country, including payments under the YouTube Partner Program, shall likewise be included in the computation of the gross income of the social media influencer and shall be subjected to the schedular or corporate tax rates."
Resident aliens with income derived from Philippine-based contents are also taxable, the BIR said.
"Thus, the burden of proof that the income was derived from sources without the Philippines lies upon the resident alien. Absent such proof, the income will be assumed to have been derived from sources within the Philippines," it said.
Social media influencers are also liable for business tax, which may either be percentage or VAT (Value Added Tax), according to the BIR.
Self-employed individuals whose gross sales or gross receipts and other non-operating income do not exceed the VAT threshold of P3 million will have the option to avail of the 8 percent tax on gross sales or gross receipts and other nonoperating income in excess of P250,000, the BIR said.
Mixed income earners shall be taxable for all income earned from compensation and income earned from business or practice of profession, it added.
Social media influencers who fail to comply will be criminally liable and will be fined P500,000 to P10 million, the bureau said.
FROM THE ARCHIVES