Being an influencer is becoming more and more popular in society. But if the hobby becomes a profession and the income increases, taxes have to be paid, just like with other professions.
How do influencers actually make their money?
The profession of influencer is no longer so unknown. Many of the biggest influencers, including BibisBeautyPalace and Rezo, have over a million followers on the Instagram, YouTube and TikTok platforms. Nevertheless, it is not always clear to everyone exactly how and with what social media stars actually earn their money. Stiftung Warentest explains that influencers can earn money through both paid advertising and product placement. Depending on the platform and number of followers, an influencer can earn several thousand euros per post. On the YouTube platform, for example, money can be earned for viewers in addition to advertising revenue through paid channel membership. Another way to make money as an influencer is affiliate marketing. In such collaborations, influencers link the company in question on a post in order to advertise a specific product. If the product is purchased via this link, the influencer receives a commission.
Influencers have to take this into account when it comes to taxes
If an influencer’s annual income is above the tax allowance of 9,744 euros, taxes must be paid, as with other earnings, explains Stiftung Warentest. Influencers should also register a business, which also entails the obligation to submit an annual tax return. As Business Insider reports, a whopping 15,000 influencers have already registered their own businesses in this country. Besides income, there are even less obvious things that need to be taken into account for tax purposes. If an influencer receives gifts, free products or a free trip with a value of over 10 euros, this counts as business income for tax purposes, according to Stiftung Warentest. According to Stiftung Warentest, there is no documentation requirement, but “influencers should still meticulously document all income, regardless of whether it is free products or sponsored posts,” in order to be able to provide accurate proof of everything in the event of questions from the tax office.
Since the line between private and business life is often not clearly visible for many of the social media stars, it is becoming increasingly difficult for tax offices to track influencers’ income, according to Business Insider. An “online task force” has now been founded in Bavaria to search for contributions on the platforms that may indicate income. In addition, the income of influencers should be examined through audits of the clients. “If irregularities are discovered during an investigation by the tax authorities, it can not only be unpleasant, but also expensive. Clients from abroad can also be examined,” says Business Insider.
Dubai tax haven
Some influencers, including those from Germany, move abroad – often to Dubai. But what makes Dubai so attractive for influencers? Apart from the beautiful backdrop for videos and photos, social media stars in Dubai do not have to pay taxes on their income. To do this, however, they are obliged to acquire an “influencer license” in advance, as the tax consulting company Wendl & Köhler explains. This license costs around 3,500 euros per year. As part of the license, however, the influencers also agree that they will only portray the emirate positively on social media, which critics consider to be censorship.
E. Schmal / editorial team finanzen.net
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