taxation for bloggers Archives

Whenever my content creator friends and social media influencers would ask me when is it the best time to pay taxes, I would always tell them that once you are earning, you have to pay. And this is not because I want to be some goody two shoes in this industry, but personally, what I value most is peace of mind. So today, let’s go through this RMC about Taxation for Social Media Influencers.

Believe me! I had my fair share of missed tax filings and books that were not updated years ago, and it was not a fun thing to go through. I had to pay exorbitant fees, but I couldn’t blame anybody else. Paying taxes is the responsibility of the tax payer, so I couldn’t blame my accountant or blame the BIR for charging me. Having no knowledge of the law is not an excuse, so we all better brush up on learning about taxes.

Why are we discussing this? Yesterday, our tax ministry, the BIR, released a Revenue Memorandum Circular (RMC) or a memo reminding everyone that all Social Media Influencers to file and pay their taxes. This is RMC97-2021. Some of you would ask “who are Social Media Influencers”? So the BIR actually gave a run down of who these people are and they specifically mentioned those who are under the YouTube Partner Program or basically people who are earning from Youtube.

But, if you earn via direct advertising, meaning you get paid by brands, or you earn via other platforms like Facebook (via support badges, stars, etc.), Twitch (via bits and subs), Kumu (via in app gifts, etc.), Instagram, even Affiliate commissions, please please please do pay taxes for these things, well. The law states that if you earn any income on Philippine soil, you will have to declare taxes for these earnings.

So how do you begin?

I wrote a blog post before where I explained how you can start paying taxes as a freelancer: A FREELANCER’S AND CONSULTANT’S GUIDE TO USING TAXUMO

A Freelancer’s and Consultant’s Guide to Using Taxumo

Feel free to go through this post.

In the RMC, BIR also goes through the allowable deductions or basically, what are the expenses that you can declare. It also goes through compliance from registration, to updating your books and filing and paying taxes (which I discussed in the shared linked above for Freelancers).

The BIR goes on to remind the penalties for tax evasion and failure to file a return.

Penalties for Online and Social Media Influencers who evade taxes and who fail to file their taxes

After that, the BIR discusses double taxation. Double taxation is basically being taxed by the platforms that you use and being taxed as a professional. An example for this is that Google LLC withholds 24% of your earnings. Then when you declared in the Philippines as a tax payer, you will have to pay VAT/Percentage, Income tax and (if applicable) withheld taxes.

To avoid double taxation, one must secure a tax residency certificate (TRC) from the BIR and then this is submitted to the foreign platform who is applying taxes in their own countries. Note that this is only applicable to platforms and entities in countries that the Philippines has a tax treaty with.

What happens to your taxes in that foreign country? In the case of Google LLC, the previously withheld 24% will now become 15% and then you still have to pay taxes in the Philippines. Of course, for other platforms, they will have yet to share what their own taxes are.

So with the reminder yesterday, the last section of the RMC states this…

So there you have it. If you have questions or you need assistance, feel free to chat with Taxumo via the chat button on their site: https://www.taxumo.com or email them your inquiries customercare@taxumo.com.

Bloggers need to pay taxes.

Today, I’ve been seeing a lot of news that bloggers, filmmakers, digital workers and freelancers need to pay taxes. Frankly, I’m not shocked. This has been the rule in the Philippines since years ago.

I’ve been blogging for more than a decade now and when I started earning and accepting revenue for my blog, that’s when I started paying my taxes. I started paying my taxes since 2013 (7 years ago). So this news today that bloggers need to pay taxes isn’t really shocking.

Advantages of Paying Taxes

Other bloggers wonder why I get to haggle on my rate and this is because I can issue an official receipt. The reason why bloggers who pay taxes can negotiate for a better rate is because companies can book this as an expense. Imagine paying thousands of pesos and you can’t declare the amount they pay bloggers as a deductible expense? That’s basically thousands of pesos going down the drain for the companies.

Another thing is that I loved that it was so easy for me to get a Visa going to Japan 2 years ago. I pretty much had every requirement in the check list that the agency had. No sweat applying for VISA.

There are a lot more benefits like securing loans, credit cards, HMOs, etc.

How to get started

First thing’s first… don’t panic. Collate all the requirements that you need. If you don’t know what the requirements are, feel free to email bizreg@taxumo.com and they will give you a super comprehensive list of requirements. Taxumo helps process BIR registration for Php 4999 (discounted from Php 6000) until July 31, 2020. You need not go to the RDO and register; they will process it for you.

Aside from the processing fee of Taxumo (you can also do it yourself, too, if you have the time), here is my own breakdown of the actual cost.

The Actual Cost of Registration

In this article from Manila bulletin, they indicated that the only cost are Php 500 for registration fee and Php 30 for Documentary Stamp.

From my perspective, here is an approximation for costs:

Php 530 – BIR Registration and Doc Stamp

Php 2500 – Approximation of your Official Receipt (first ten booklets … yes, they need to be 10)

Php 200 – Manual Ledgers (really depends on how many BIR would require; oftentimes only two books for Professionals and 4 books for Sole Proprietors)

Php 200 – Notary for my SPA since I had Taxumo do it for me

Php 350 – Occupational Tax Receipt and Barangay Clearance

Php 250 – Delivery back to your place of all the documents (approximation since depends on the distance from Taxumo)

Php 2000+ – Payment for DST2000 if you are renting.

Total will be approximately Php 6,030. Again, this is an approximation of the costs. So Taxumo will ask for an advance of around Php 5750.

To help educate the market on BIR registration and Taxation, Taxumo is doing an Ask – Me – Anything Community Roadshow. If you are a community admin or founder, feel free to contact Taxumo via customercare@taxumo.com.

For other resources, please see these links from my other blogger friends:

My True Story – How I Registered with BIR as a Self-Employed Blogger

https://www.topazhorizon.com/2019/03/freelancers-professionals-small.html

If you have questions about bloggers and taxes, please feel free to message me in the comments section. Search for more articles on taxes and BIR registration on this blog… I have lots! haha!