REVENUE REGULATIONS & MEMORANDUM CIRCULARS

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Are you an aspiring or successful YouTuber or social media influencer? 

Pursuing this passion is fun, exciting and provides unlimited revenue stream possibilities. However, BIR Revenue Memorandum Circular 97-2021 or “Taxation of Any Income Received by Social Media Influencers” issued last August 16, 2021, strongly impacts your passion (and income) to express yourself on social media. 

The memorandum gives the BIR the power to tax and regulate this thriving livelihood because all financial gains, monetary and otherwise, are part and parcel of your personal income. 

As an influencer, you build your reputation with your knowledge and skills; you generate viewer's interest with engaging content. You make sure that you have an updated blog post in your channels on Youtube, IG, FB, and other platforms. You dedicate so much of your time to build your image, and we hope this BIR regulation won't stop you from your goals. 

Under this memorandum, influencers are classified as self-employed or sole business proprietors. You are required to register yourself with the BIR at your respective Revenue District Office (RDO). You have to update your registration and specify a change in taxpayer details if currently employed in a private company and classified as an employee. 

The new law considers your income from social media activities as taxable. It may come as cash, ex-deals, YouTube ads, sponsored ads, and advertising activities. Even brand ambassadors are subject to this BIR regulation.

There are specific ways to manage your income tax. One way to do this is to properly declare your income and all its allowable deductions to reduce your taxable income further. According to the RMC 97-2021, you are allowed to deduct expenses from your income to lower your taxable income and decrease your tax payments.

Deductible expenses that an influencer enjoys are:

• Filming expenses (cameras, smartphones, microphone, and other filming equipment);
• Computer equipment;
• Subscription and software licensing fees;
• Internet and communication expenses;
• Home office expenses (ex. proportionate rent and utility expenses);
• Office supplies;
• Business expenses like travel or transportation costs related to the YouTube business, payment to an independent contractor or company for video editing, costume designer, advertising, and marketing cost (contest costs and give-away prizes). 
• Depreciation expense;
• Bank charges and shipping fees

You may only deduct the said expenses if you choose to be taxed through the Graduated Income Tax rate with itemized deduction. 

Send us as a PM through this website to know more about RMC 97-2021 and how we can help you. We will take care of your BIR concerns as you continue to pursue your passion!