Social media influencers, gamers, live streamers, online sellers and other people engaged in generating income online is in a bit of fear after the BIR releases a new memo – “Revenue Memorandum Circular 97-2021, seeking to clarify the taxation of any income received by social media influencers.” Should you actually worry about it? Is it actually new?
What is Revenue Memorandum Circular 97-2021?
“The RMC is really just to emphasize that social media influencers, like any person earning income, is subject to income tax and VAT,”Lea Roque, principal at the Tax Advisory and Compliance Division of Grant Thornton Philippines
The memorandum circular is directed to individuals or groups who are receiving income in cash or in-kind from any social media site or platform in exchange for services performed as bloggers, video bloggers (vloggers), or as an influencer, in general, and from any other activities.
The BIR issues RMC 97-2021 which clarifies taxation of income of social media influencers.— CNN Philippines (@cnnphilippines) August 16, 2021
These are defined as taxpayers receiving income (in cash/in kind) from any socmed site/platform for services performed as bloggers/video bloggers and other activities (1/3) | @pplmanuel pic.twitter.com/ORaqWwFkvc
Should You Worry About It?
The truth is any person or group of persons earning an income from the Philippines is required by law to pay taxes. This is included in the Tax Code and even if the online source of income is not on that code specifically, it does not mean that they are exempted.
Thus, this is not a new law but merely a reiteration that you should pay your taxes with due diligence. Now, should you worry about it?
If you are a person who is engaged in online selling, blogging, or other online activities with payment but is not above Php250,000 then you need not worry. There is an exception for those who are earning below that threshold but if you are earning more especially for those who are raking millions from YouTube, then you should begin computing your tax payables.
LOOK: The memo illustrates how much tax should a Filipino social media influencer in the country pay after receiving $200,000 (about ₱10,000,000) in advertising revenues from U.S. enterprise resident Google, which owns social media giant YouTube (3/3) | @pplmanuel pic.twitter.com/TdeyGhjj7s— CNN Philippines (@cnnphilippines) August 16, 2021
If you are already paying taxes however for your income generated online from the source then you should also report that to the BIR. You need to file a Tax Residency Certificate (TRC). The TRC, according to the BIR memo, avoids the risk of double taxation – their foreign income won’t be taxed twice: in the foreign country, and again in the Philippines.
What If You Do Not Pay?
If you do not pay your taxes then you are in danger of being prosecuted for Tax Evasion and that is something you do not want to happen.
Better to do your duty as a citizen than being fined and be imprisoned for it.
Also listed are penalties, upon conviction thereof, for:— CNN Philippines (@cnnphilippines) August 16, 2021
Attempting to evade/defeat tax: Fine of ₱500,000-₱10,000,000 & imprisonment for 6-10 years
Failing to file returns, supply correct info: Fine of not less than ₱10,000 & imprisonment for 1-10 years (2/3) | @pplmanuel pic.twitter.com/anyrxhrjNL
What Should You Do?
The best way is to visit the BIR Revenue Office in your area or call them and ask for the necessary requirements and information. In some local municipalities and cities as well there is a way by which you can register as a self-employed individual, so ask them.