What is Revenue Memorandum Circular 97-2021?
RMC 97-2021 was issued by the Bureau of Internal Revenue in August 2021, depicting the taxations of any income received by Social Media Influencers.
Social media influencers are defined by section 3 of the said circular as “all taxpayers,
individuals or corporations, receiving income, in cash in kind, from any social media sites and
platforms (YouTube, Facebook, Instagram, Twitter, TikTok, Reddit, Snapchat, etc.) in exchange
for services performed as bloggers, video bloggers or ‘vloggers’ or as an influencer, in general,
and from any other activities conducted on such social media sites and platforms.”
And when the RMC means these income-generating online personalities are subject to taxation, it means income tax and Percentage or Value-Added Tax as per Section 23 of the NIRC, as amended.
Their income tax is based on their income from the following sources, as per Section 4:
- YouTube Partner Program — (Advertising revenue, Channel membership, Merch shelf, Super Chat, and Super Stickers and YouTube Premium Revenue)
- sponsored social and blog posts
- display advertising
- becoming a brand representative/ambassador
- affiliate marketing
- co-creating product lines
- promoting own products
- photo and video sales
- digital courses, subscriptions, e-books
- podcasts and webinars
Aside from their income, there is also business tax, determined by either percentage or VAT.
Plus, the allowable deductions as per Section 34 of the NIRC, which dictates “in computing taxable income subject to income tax under Sections 2a); 25(A); 26; 27(A), (B), and (C); and 28 (AXl), there shall be allowed as deduction from gross income, among others, all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on or which are directly attributable to, the development, management, operation and/or conduct of the trade, business or exercise of a profession.”
There are also deductions taxpayers may opt for—Optional Standard Deduction (OSD) or a standard deduction not exceeding forty percent (40%) of gross sales/receipts in the case of individual taxpayers, or 40% of its gross income in the case of corporations.
No substantiation is required for the OSD. To be entitled to OSD, however, the taxpayer must
signify in return the intention to elect OSD.
Just like anyone else, social media influencers are obliged to obtain these requirements to comply with their taxes as per Section 6 of the Circular, such as registration with the BIR and updating of registration information; keeping of books of accounts; filing of tax returns and payment of taxes; and withholding of tax and remittance of the same to the BIR (if applicable),
Social media influencers who are still confused about this recent ruling by the BIR may consult us to help them enlighten and what ACG can do to help them fix their tax obligations. Consult us now by sending us an email at email@example.com