Taxation of Influencers in Taiwan: Current Rules, Challenges, and the Impact of New Regulations
Introduction
The growth of digital platforms has created a new wave of content creators and influencers in Taiwan, earning money from advertising, sponsorships, live-streaming, and merchandise. However, this rapid expansion has far exceeded existing tax laws, causing confusion, compliance issues, and legal complications. Recent actions by Taiwan’s Ministry of Finance to develop clearer, industry-specific guidelines mark an important shift in how influencers and content creators are taxed—especially for smaller operators.
Current Taxation Framework for Influencers
Taiwanese law already imposes multiple levels of tax obligations on influencers, even before the finalisation of dedicated rules.
- Taxable Income: All revenue sources—including ad earnings, sponsorships, merchandise sales, live-streaming gifts, and platform-based income—are subject to taxation whether the creator operates as an individual or through a registered business.
- Income Tax: Taiwan applies a progressive personal income tax system, with rates ranging from 5% to 40% based on total taxable income. Influencer earnings must be reported as “profit-seeking” income in annual tax declarations.
- Business Tax (VAT):
- Influencers engaged in ongoing, organised economic activities must register for business tax if monthly sales surpass NT$40,000 (services) or NT$80,000 (goods).
- For monthly sales below NT$200,000, creators can utilise a simplified reporting process and benefit from a reduced 1% business tax rate.
- Those earning above this threshold must register completely, issue government invoices, and pay business tax at the standard 5% VAT every two months.
- Profit-Seeking Enterprise Income Tax: If an influencer sets up a company, profit is taxed at a flat rate of 20%, with an additional 5% on undistributed profits.
- Enforcement Practices: Currently, compliance is mostly voluntary, which leads to unintentional violations as rules for digital creators are not well-publicised or clearly defined. Some high-profile influencers have been penalised for non-reporting, drawing attention to the need for tailored guidance.
Challenges Faced by Taiwanese Influencers
Ambiguity and Complexity
- Influencer income often comprises multiple revenue streams that don’t easily fit into standard tax categories, particularly for non-incorporated individuals.
- There are few clear definitions of how to categorise income from ads, sponsorships, donations, and online merchandise.
Reliance on Voluntary Reporting
- Without specific rules, compliance relies on the creators’ judgment. Many individuals genuinely lack awareness or knowledge, resulting in underreporting and increased risk of back-tax claims and penalties.
Payments from Foreign Platforms
- Income from global services (YouTube, Twitch, etc.) complicates matters through cross-border payment structures, often leading to double taxation due to the lack of treaties (especially between Taiwan and the U.S.).
- Claiming foreign tax credits requires documentation, sometimes in English or other languages, which many creators may find difficult to obtain or comprehend.
Complicated Income/Earnings Tracking
- Payments can be irregular or fall below administrative thresholds, leading small creators to neglect their obligations and heightening their risk exposure.
Mismatch with International Tax Regimes
- The global digital nature of content creation isn’t reflected in Taiwanese tax law, which falls behind in adapting to issues of revenue origin, value creation, and digital commerce.
Upcoming Guidelines and Their Expected Impact
To address these widespread issues, Taiwan’s Ministry of Finance is preparing new tax guidelines targeting influencers and online creators.
These are expected to:
Clarify Income Categories:
- Clearly define what constitutes influencer income, ranging from platform payments and advertising to gifts, subscriptions, and merchandise.
- Segment revenue as individual salary, self-employment/professional practice, or “other income,” with matching tax rates and rules.
Set Explicit Reporting and Taxation Obligations
- Make clear that all creators—regardless of scale—must report their earnings, eliminating loopholes and informal “hobbyist” interpretations.
Detailed Expense Deductions
- Specify deductible business expenses, such as equipment, phone bills, and production costs, enabling creators to lower taxable income with proper documentation.
Broaden the Scope of Enforcement
- Ensure that even small and medium-sized creators (with as few as 1,000 subscribers or limited monthly sales) are protected, providing clarity for influencers who previously operated in regulatory grey zones.
Establish Uniform Treatment
- Publicise that influencers will be treated like any other profession—no special exemptions or discounts for online work compared to traditional self-employment.
Impact on Small-Scale Content Creators
While the coming rules will bring much-needed clarity, they also introduce new compliance burdens, especially for creators with lower or intermittent income:
- Administrative Burden: All income must be monitored and reported, requiring small creators to keep thorough records and potentially register as a business if certain thresholds are exceeded.
- Expense Offsetting: Clear rules can permit the deduction of valid costs, benefiting those with modest yet increasing income.
- No Special Relief: Small-scale creators receive no exemptions based solely on size or infrequency of income. Taxation begins once thresholds are reached.
- Reduced Legal Gray Area: Clear and detailed guidelines will lower the risk of expensive mistakes and penalties after the fact but require active tax management even at low income levels.
Conclusion
Taiwan’s changing tax system for influencers aims to align with the digital economy by providing clearer rules and more defined responsibilities. Influencers—particularly small-scale and part-time creators—must get ready for stricter compliance, including detailed income reporting and expense tracking. Nonetheless, these updates promote fairer treatment, safer planning, and lower chances of accidental non-compliance. If you are a content creator in Taiwan, now is the moment to learn about these responsibilities, consult experts when needed, and develop good record-keeping habits as the new regulations take effect.
Get In Touch
For more information please contact Michael Velten.
michael@veltenadvisors.com
+6590687547
391B Orchard Rd, Level 22, Ngee Ann City Tower B, Singapore 238874
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