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Tax requirements for influencers

Influencers who operate on social medial networks where they earn their money by promoting products or lifestyles should be aware of the tax pitfalls that such activities may entail.

(1) Document the receipt of gifts – When influencers get invitations to events, for restaurant visits and hotel stays these are usually free of charge. In such cases, however, in return the host would like the influencer to create publicity by presenting the respective venues in the best possible light and then posting this. Thus, a service is expected in return. These are therefore not deemed to be gifts for tax purposes. The same applies to free products that are sent to influencers, such as, cosmetics, outfits from fashion brands or mobile phones. When influencers keep these products and present them on their channels then the products are deemed to be income that has to be documented, in a list, by the influencer. This list has to include the date of receipt, the donor, the type of gift and its cash value. The value of such gifts has to be recorded at the usual final price at the point of sale (taking into account the standard discounts). If you fail to keep a log of the gifts and if they are not properly taxed then the local tax office may make an estimate on the basis of the postings on the internet. This could turn out to be disadvantageous for the influencer. Such non-cash incomes are generally liable for tax. If they are not declared then, potentially, influencers run the risk of being accused of tax evasion. 

Please note: Gifts with a value of less than €10 are generally tax-exempt and do not have to be documented. The same applies if, after the public presentation, a product is returned to the sender.

(2) Document business expenses – Influencers frequently give rise to the impression that their postings originate from their private lives. However, these postings are often commercial advertisements. If influencers incur costs for advertisement postings (e.g. for a trip with an overnight stay) then the local tax office might not accept them as business expenses because of the appearance of something private, as it is assumed that the trip was private.

(3) Travelling for a mix of reasons – If influencers combine a business trip with private vacation days then the private and business expenses would have to be kept separate. 

Please note: For all business expenses, receipts should be collected as documentary evidence. 

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