Philippines: Tax treatment of payments to “social influencers”

Provisions merely reiterate what is already contained in the tax law and other Bureau of Internal Revenue (BIR) issuances.

Provisions of RMC 97-2021 merely reiterate what is already contained in the tax law

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) 97-2021 (16 August 2021) regarding social media influencers defined as “all taxpayers, individuals or corporations, receiving income, in cash or kind, from any social media site and platform…in exchange for services performed as bloggers, video bloggers…or as an influencer, in general, and from any other activities performed on such social media sites and platforms.”

  • RMC 97-2021 classifies the various sources of a social media influencer’s income as including sponsored social and blog posts; display advertising; becoming a brand representative/ambassador; affiliate marketing; co-creating product lines, promoting one’s own products; photo and video sales; digital courses, subscriptions or e-books, and podcasts and webinars.
  • RMC 97-2021 clarifies that, to constitute gains or profits from the conduct of trade or business, payments must be received by a social media influencer in consideration of the services rendered or to be rendered, irrespective of the manner or form of payment.
  • RMC 97-2021 addresses the different business expenses that a social media influencer can claim as deductions from its income tax such (such as filming expenses; computer equipment; subscription and software licensing fee; internet and communication expenses; home office expenses; office supplies; business expenses, depreciation expenses and bank charging and shipping fees).

KPMG observation

Tax professionals note that the provisions of RMC 97-2021 merely reiterate what is already contained in the tax law and other BIR issuances. Other sections of RMC 97-2021 reiterate the rules and provisions on double taxation, tax residency certificate, and the effects of taxes withheld in foreign countries.
 

Read an October 2021 report prepared by the KPMG member firm in the Philippines

 

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