by Emiel Vanhée
Influencers. They are everywhere you look on social media. Huge retinues of loyal followers track their every move. They use these platforms to recommend certain products and services and inspire others to buy them, consciously or unconsciously. Every profession has its own obligations, tax-related and otherwise, and being an influencer is no exception. Following several recent parliamentary questions and an explanatory memorandum by the tax authorities, we will delve deeper into these tax obligations.
Income earned as an influencer may qualify as either professional income or miscellaneous income.
To be considered miscellaneous income, income must be the result of occasional activity, without a business entity having been established for this purpose. Such earnings must be reported on your personal income tax return and are subject to a 33% flat rate. Costs incurred may be deducted.
Besides miscellaneous income, compensation can also be taxed as professional income. This means that, after deducting any costs, the earnings will be subject to progressive rates.
The authorities determine which type of taxation is applicable based on the actual circumstances. Is an influencer using a middleman or agency to find clients, for example? In that case, the influencer is approaching their activities in such a way that these earnings count as professional income.
Influencers who receive free products or services in return for promotional activities, should be aware that such ‘rewards’ are also taxable income. The minister considers this type of compensation a taxable benefit in kind. The taxable amount is equal to the goods or services’ normal purchase price. You must report this amount as miscellaneous or professional income on your personal income tax return.
An influencer who provides services, regularly (daily, weekly or monthly) and independently, in the pursuit of an economic activity, must pay VAT. In that case, the influencer must also register for VAT. This creates a number of obligations.
For instance, they must issue invoices inclusive of VAT and subsequently pay this VAT to the State. This also means they can deduct the VAT on purchase invoices.
An influencer can also apply for an exemption. This will only be possible if their (annual) turnover is less than EUR 25,000 (exclusive of VAT). If they choose this option, they must still register for VAT, but many other VAT obligations no longer apply. They are not obliged to include VAT in their invoices or submit periodic VAT returns, for example.
Do you require further information about VAT or about income received by an influencer? Please don’t hesitate to contact one of our experts
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
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