Bloggers told to declare non-monetary benefits for income tax filing
Bloggers told to declare non-monetary benefits for income tax filing. One says: This is content, not income
The taxman has come knocking again this tax season - this time on the doors of social media influencers.
Those relying on social media to make money - like bloggers and YouTubers - will now have to declare benefits-in-kind, even if they are not monetary.
The letter the Inland Revenue Authority of Singapore (Iras) sent influencers early this month surfaced on the Internet this week.
Part of the letter read: "All non-monetary benefits such as sponsorships, products and services received are considered gains and profits from services provided as a social media influencer (including blogger, YouTuber).
"As such, the market value of such products/ services will be subject to tax and must be reported."
The New Paper understands the letter is part of Iras' engagement with the self-employed, and is not meant to target or clamp down on bloggers.
But with sponsorships ranging from beauty products to cars and plastic surgery, Iras' letter is sending bloggers into a tizzy.
Full-time blogger Wendy Cheng, also known as Xiaxue, told TNP: "I'm an 'antique' blogger so (Iras) probably knows of me and wants to target me."
Ms Cheng, who switched to full-time blogging in 2005, has been open about her sponsored items, including renovation works that came up to almost $100,000.
"I was quite surprised to receive (the letter). It's a bit scary to have to do this now. I have no idea how exactly to do it and what exactly counts," said the 32-year-old who also reviews beauty products and services.
"If they had told us a bit earlier, we could have kept a better record of the things we receive. Sometimes, people just send things to the agency and they just pass it to me.
"There's often no obligation (to review). If you like it, then you say something about it," she added.
TNP understands that Nuffnang, the agency which manages bloggers like Ms Cheng, will be meeting Iras to clarify what bloggers should declare.
Mr Winston Tay, who runs parenting blog blogfather.sg, echoed Ms Cheng's frustration about keeping tabs on non-monetary benefits in the past year.
The 38-year-old public relations and marketing practitioner also disputed Iras' classification of non-monetary benefits as a form of income.
"We're kicking up a big fuss because as content creators, the non-monetary benefits we receive have always been treated as 'communication' (and 'content'), not 'income'...
"We don't receive the product or service as payment. We use the product or service in order to create relevant content. To us, it's not a source of income as Iras defines it; it's a source of content. Without it, we literally have nothing to write about," he said.
A prominent female blogger, who declined to be named, questioned if the same standards should be applied to those working in magazines or public relations companies.
"The magazines and PR companies get many free products, not just for advertising but sometimes reviewing as well. Why is it that these people are not targeted? There are many occupations in which people get payment in kind. Why are they not taxed for that as well?
"If you want to do this, many people have to adhere by your rules. Now, bloggers are targeted.
"It's probably partly my fault. Bloggers are traditionally 'hao lian' (Hokkien for boastful) about the free things they get... Some people get pissed off about it," she said.
Expert: Taxman tightening screws
While bloggers told The New Paper they were surprised by the Inland Revenue Authority of Singapore's (Iras) letter, Templars Law's Steven Lam thinks it is about time they are taxed on their non-monetary benefits.
Mr Lam, who has a master's in tax law, said: "It's a source of income tax that has fallen through the crevices, and Iras is now tightening it.
He said the taxman targets specific industries from time to time, and had previously looked into lawyers and doctors at different stages.
"It's probably a policy decision for them to be looking at the online world closer than the previous years," Mr Lam said.
He pointed out that the problem lies in enforcement.
He added that Iras could be targeting the more prominent bloggers who have shared their sponsored items openly online.
According to Iras, salaried employees who are also part-time social media influencers can be taxed on their income from social media marketing activities, too.
Mr Lam said: "Many people think that tax is in relation to income, which they define as monetary income. But income has a wider meaning than just money. It deals with any form of products or services in payment of the services you render.
"From the legal position, receiving vouchers or gifts is a form of income. You have to attribute a value to it."
While influencers are required to declare all their non-monetary benefits, TNP understands that Iras will assess and decide which items are taxable.
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File return by April 18
Iras would like to remind those who received a letter, form or text message from them to file an income tax return by April 18.
The following two groups of people who have not heard from Iras are also reminded to declare their income earned last year in Singapore:
l any self-employed individual who has received an annual net business income more than $6,000 in the preceding year
l any individual who has received an annual income (from employment, rental, business etc) more than $22,000 in the preceding year