What you need to consider
As the number of social media influencers and the level of revenue being generated by social media influencers in Australia continues to increase, there are a number of things that you need to consider to ensure that you are complying with your tax obligations in your role as an influencer.
Are you running a business?
There is no one single factor that will determine whether you are running a business, however considerations include:
- Are your activities being undertaken for a commercial reason?
- Do you intend to make a profit, or do you genuinely believe you will make a profit from your activities?
- Do you regularly and repeatedly undertake your activities?
- Are your activities planned, organised and carried out in a businesslike manner?
If you are running a business, you will need to report and pay tax on your profits.
If you are receiving non-cash benefits for the services you are providing, you will need to consider the potential tax implications.
Non-cash benefits include any goods or services that you receive in return for your business activities and could include items such as free accommodation, travel, use of a car or free clothing.
In Australia, influencers must pay income tax on non-cash benefits received in return for services provided as part of a business activity.
While small gifts do not need to be declared as income, if you receive non-cash items of substantial value, the Australian Taxation Office will expect you to declare and pay tax on the market value of the benefits received.
Expenses you may be able to claim as a tax deduction
Depending on your area of influence, to the extent that expenses are incurred for business purposes, tax deductions you may be able to claim include the following:
Ensuring you get appropriate advice when you commence your influencer activities can help prevent problems and surprises later on.
If you are already an influencer or considering becoming one, make sure you speak to an accountant.
Gunderson Briggs specialises in providing accounting services to social media influencers, creators and agencies. To get in touch, click here.