By DayakDaily Team
KUCHING, Jan 21: Social media and digital influencers are required to declare all forms of income, including free products and gifts received for reviews or promotions, according to new guidelines issued by the Inland Revenue Board (LHDN).
According to a report by New Straits Times, the guidelines outline the tax treatment of income earned by social media and digital influencers and are intended to facilitate compliance with tax laws by both the public and LHDN officers.
LHDN noted that the Director-General of Inland Revenue has the authority under Section 134A of the Income Tax Act 1967 to issue, amend or revoke the guidelines at any time, if necessary.
“Social media influencers are not only individuals who can influence others and have large followings, but are also capable of generating substantial income through their activities as influencers on social media and digital platforms.
“Social media influencers should be recognised as a profession as they are able to generate income arising from and received through social media platforms or from marketing activities resulting from their influence on social media.
“An influencer’s activities include producing audio, video or written content, appearing in social media programmes or events, being involved in product promotion and receiving payments, gifts or any form of benefit from any party due to their involvement on social media,” it said.
According to LHDN, influencers are divided into two main categories: individual influencers and object-based influencers.
Individual influencers include politicians, artistes, athletes, professionals, students or homemakers, while object-based influencers consist of objects such as animated characters, acting characters or characters created and registered on any social media platform that have followers.
On taxable income, LHDN said this includes direct payments from social media platforms, fees as brand ambassadors on social media, merchandise sales, sales of influencer accounts or IDs on social media platforms, royalties on social media characters and other forms of income received.
It added that influencers may receive payments through various methods such as management fees, talent fees, participation fees and consultancy fees.
“These payments may be received in the form of cash payments, goods, discount vouchers, free services, ‘likes’ (emojis) and gifts or appreciation on social media that have monetary value.
“In terms of allowable expenses, social media influencers may claim expenses allowed under Section 33 of the Income Tax Act, including internet costs, filming and editing expenses, while personal or capital expenses are not allowed.
“Social media influencers must keep records of income received and supporting documents relating to all income and expenses for auditing purposes by LHDN, and such records and supporting documents must be kept for seven years from the end of the year in which the income tax return is submitted to the Director-General of Inland Revenue,” it said. — DayakDaily
