Taxation of Bloggers & Influencers in Singapore

Taxation of Bloggers & Influencers in Singapore

Did you know?

The Inland Revenue Authority of Singapore (“IRAS”) has consistently emphasised that bloggers and social media influencers are required to file income taxes if they are engaged in a trade or business.

As stated in IRAS’ Essential Tax Information for Social Media Influencers, individuals who consistently blog and take part in social media activities that yield annual net business income over $6,000 must report it as self-employed income. It is essential to declare all types of income and benefits, regardless of whether they are monetary or non-monetary.

IRAS has specified that engaging in activities on social media platforms such as Instagram, Twitter, Facebook, and YouTube, or placing banner ads on blogs, can be considered as conducting a trade or business.

To sum up, if you blog or influence on social media, make sure to submit your tax return by April 18 each year for the income you earn from these activities.

When Are You Considered to be Carrying on a Trade or Business?

Typically, blogging and social media activities pursued as hobbies aren’t classified as a trade or business, and therefore, are not taxable.

Determining whether the activities qualify as a hobby or a business (and, if it’s a business, when it starts) is a matter of fact.

If blogging or social media activities are conducted consistently for both monetary and non-monetary rewards, and the net annual income exceeds $6,000, this income must be reported as trade or business (i.e., self-employment) income.

Being a full-time salaried employee while participating in social media on a part-time basis does not exempt your income from these activities from being taxable.

What Will and Will Not be Taxable

All payments and benefits gained through blogging, advertising, and any activities conducted on social media platforms as a trade or business are considered profits from a trade or business and are taxable.

Payments made to bloggers or social media influencers for their services can take the form of cash, goods, or other services. Both monetary and non-monetary compensation, including benefits-in-kind, are subject to taxation when received in exchange for services provided or to be provided by these individuals.

Any benefit provided to the families and friends of bloggers or social media influencers, whether monetary or in-kind, will be taxable to the influencers themselves.

Because tracking and accounting for numerous low-value non-monetary benefits can be complex, bloggers and social media influencers are exempt from declaring these benefits if they meet the following two criteria:

The product/service is provided to them occasionally for one-time use or evaluation, and

The value of any product or service received does not go beyond $100.

When the product or service is valued over $100, the entire value of the benefit must be reported and is subject to taxation.

The $100 threshold excludes non-monetary benefits for bloggers or social media influencers when these are recurring offerings provided over time.

IRAS Examples

Example 1: You get five eyebrow threading sessions worth $98. Since this service is rendered over time, you must declare it in your tax return, even though the value is below $100.

Example 2: You receive 10 masks initially, each priced at $10. Since this is not a recurring supply and totals less than $100, there's no need to declare it.

Example 3: You participate in a five-course meal tasting at a restaurant that costs $156. You need to declare this because it is for one-time consumption and exceeds $100.

Claiming Expenditure and Capital Allowances

Bloggers and social media influencers may deduct specific expenses as long as these costs are incurred solely to generate income in accordance with section 14 of the Income Tax Act and are not restricted by section 15.

Section 14 states that you can claim expenses only if they were incurred “wholly and exclusively” for the purpose of generating your income. Additionally, any domestic or private costs are not deductible, as they must also be incurred “wholly and exclusively” to earn income.

When expenses are associated with income-generating activities and personal use (such as utilities and internet services purchased for both income-earning and private purposes), only the portion related to income-generating activities can be deducted.

This proportion is generally determined based on how much the expense contributes to generating income versus its use for personal purposes.

You can claim capital allowances on fixed assets such as office equipment and machinery used in your blogging business. For example, if you bought and used a laptop, it can be part of your expense claims. To find out how much you can deduct for your asset(s), check the IRAS website on Capital Allowances.

IRAS compliance focus and tax audits

A constant focus for IRAS is the auditing of businesses operating within the digital economy, such as content creators and social media influencers.

IRAS has observed a pattern of compliance mistakes, including overlooking or misreporting income from sponsorships and gifts, submitting erroneous claims for personal entertainment and travel expenses not linked to business, and not maintaining accurate records of real income and expenditures.

IRAS highlighted that all income generated from social media activities, whether monetary or non-monetary (like goods and services), is subject to taxation. Non-monetary benefits are taxable if they exceed S$100 or are provided regularly.

In general, expenses must be entirely and exclusively incurred for business purposes to be considered deductible. Costs that are solely for generating income, like website maintenance, are eligible for deduction. However, personal expenses, even when partially used for business, are not deductible.

Consequently, expenses for non-business matters - such as family meals, vacation or travel costs, household groceries, and inflated salaries that do not correspond to actual services provided - are not deductible.

Business owners are required to keep both the tax invoices they issue and those they receive.

To ensure proper documentation, it is necessary to issue sales invoices and request supplier invoices.