IRAS ( Inland Revenue Authority of Singapore) has released a document highlighting the activities that are performed on social media which are taxable. It has also defined a threshold limit of S$100 which is not under the purview of taxation where value of product/service received does not exceed S$100.
Talking to Connected to India, MD of Eleven Sports Network Shalu Vasu said, “It is amazing that such a clear document has been released by IRAS. This settles everything from a tax and legal point of view. However, the bigger question of bloggers declaring their relationship with brands and businesses is an ethical one - and that will continue to be a grey area.”
According to the released document, all payments and benefits derived from the carrying on of blogging, advertising and any other activity performed on social media platforms as a trade or business constitute gains or profits from a trade or a business under section 10(1)(a) of the Income Tax Act (ITA).
It further states that payments in exchange for services performed by bloggers/social media influencers can take the form of money, goods or services. All monetary and non-monetary payments / benefits-in-kind are taxable if they are received in return for services rendered or to be rendered by bloggers/social media influencers. Any benefit whether monetary or in-kind provided to the families and friends of bloggers/social media influencers will be taxable on the bloggers/social media influencers.
Before drafting the document, IRAS had interaction with numerous blogger/ social media management companies and based on their feedback, they have made these rules. As there are complexities associated with the tracking and accounting for multiple, low-value non-monetary benefits received, bloggers/social media influencers will not be required to declare non-monetary benefits if the following two conditions are met:
(a) The product/service is given to them on an ad-hoc basis for one-off consumption or testing; and
(b) The value of each product/service received does not exceed $100.
If the value of the product/service exceeds $100, the full value of the benefit should be declared and be subjected to tax. The $100 threshold does not apply to non-monetary benefits received by bloggers/social media influencers if it is a recurring supply provided over a period of time.
Bloggers/social media influencers can claim certain expenses, provided the expenses are incurred wholly and exclusively in the production of the income under section 14 of the Income Tax Act (ITA) and not prohibited under section 15 of the ITA. Capital allowances for capital expenditure incurred in the provision of fixed assets such as machinery and office equipment for the purpose of blogging trade or business can also be claimed.