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Income Received Via Blogging, Instagram And YouTube Now Taxable In Singapore

Blogging has long been around since the dawn of the internet, when one leverages on the Internet to pen down their thoughts and share their experience with their friends and of course, other followers on the Internet. It is only natural that there will be internet personalities or influencers who stand out among others, and manage to catch the attention of brands who might want to leverage on the blogger’s popular following.

Just yesterday, some fellow bloggers have revealed that they received a letter from the Inland Revenue Authority of Singapore (IRAS), requiring them to clarify their income sources, which include products or services received via their websites.

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According to the online statement, “Payments in exchange for services performed by social media influencers such as bloggers,
YouTubers, etc. can take the form of money, goods or services. All monetary and non monetary payments / benefits-in-kind are taxable if they are given in return for services rendered or to be rendered by you. Any benefits whether monetary or in-kind provided to your family and friends will be taxable in your name.”

The website from IRAS also included some FAQs:

a) If I work full-time as a salaried employee and part-time as a social media influencer such as blogger/YouTuber, etc. will the income earned on part-time basis be subject to tax?

Answer : Yes. The income you received from social media marketing activities such as blogging, YouTubing, etc. will be assessed as self-employed income once it is ascertained that you are carrying on a trade or business.

b) Does blogging and blogging-related activities only refer to updating posts on my website?

Answer : No. Any income received from marketing activities performed on social media platforms such as Instagram, Twitter, Facebook, YouTube, etc. are also included.

c) I did not sign any contract prior to reviewing / promoting a product or service. Is the monetary / non-monetary payment still taxable?

Answer : As long as the payments are made in relation to your social media marketing activities, whether it is under contract or not, such payments are taxable.

d) I did not receive payments directly from the advertisers.

Answer : Payments are taxable regardless whether they are received directly from the advertisers, or indirectly through a social media influencer agency.

e) Are the products / services provided to my family / friends taxable?

Answer : Yes. If you and your family / friends are invited to a meal for 4 persons, you have to declare the market value of the meal for 4 persons, and not just your portion of the meal. The full value of the meal for 4 persons will be assessed in your name.

Image Credit: Mapwerkz
Image Credit: Mapwerkz

Blogging As A Hobby And A Business

For most personal bloggers, most usually start writing for themselves with the idea what whoever wanted to read it can choose to do so. At some point when the following grow, usually one would experiment with some advertising, which mostly would be Google Adsense, as a good way to cover some of the expenses of running the site. Server cost, domain cost as well as the time and other hidden costs usually make up a bulk of the expenses. To be a more effective blogger, there are a lot of resources needed – and most of them are not free. Naturally, one would need to earn some revenue (mostly via advertising) to cover the cost.

Now that the government is taxing for all revenue generated via social media, is it healthy for the industry? A blogger told 938Live that the move might “kill the whole blogging industry”, and rightfully pointed out that “Who will go for food tastings now? IRAS also has to be fair to bloggers – most of us are one-man shows with no resources to do these things.”

Another blogger, 5meaners also mentioned that “we have come to a point when a channel of expression is taxable”.

These concerns are legitimate too, though IRAS noted that this is a regular engagement with the self-employed and is not meant to target or clamp down on bloggers. Blogging as a taxable income is not uncommon – countries such as the United States or Canada also requires blogger to declare any income through personal blogs.

So here’s the catch. It all boils down to whether IRAS decides that your blog is a business, or a hobby. If your blog is a business, which resulted in a profit in previous years, you would probably receive a letter from IRAS soon. For most of the others who blog as a personal hobby to keep their friends updated, you should probably be safe.

Pretty sure that Mr Khaw Boon Wan who recently started blogging would be excluded from being taxed since there are no commercial arrangement involved.

It was also reported that in its financial year 2014/15, IRAS collected a total of S$43.4 billion in tax revenue, 4.4% higher than the previous financial year. This amount represents 71.3% of the government operating revenue. 54% of this tax revenue (S$23.4 billion) was from income tax, which includes corporate income tax, individual income tax and withholding tax. IRAS also revealed that higher individual earnings, which led to a 16 per cent increase in individual income tax collection, contributed to the higher income tax collected.

So it looks like the government is looking to collect more income tax, and making sure that everyone is properly taxed according to their income. This is essential because Singapore follows an equitable taxation model – the more you earn, the more you will be taxed accordingly, so that the tax income can be properly distributed to other areas such as education, public facilities, healthcare et cetera.

 

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