IRAS clarifies tax rules and deadline for local bloggers

The Inland Revenue Authority of Singapore has clarified the terms which govern what products and services derived from their online blogging and social media careers are subject to income tax.This comes as influencer careers become increasingly recognised as self-employment and hence subject to tax and refer to as activities which “constitute gains or profits from a trade or a business under section 10(1)(a) of the Income Tax Act (ITA)”.According to The Straits Times, IRAS has come to an agreement with social media management companies and bloggers with regard to items classified as “non-monetary benefits in kind”. These items now have to be declared under a blogger’s taxable income.In addition to the clarification, IRAS told the local news source that the online community now has until 18 April 2017 to declare items and to file their income tax documents. This is because the rules were issued close to the filing deadline this year before the clarification was made.The recent clarification by IRAS follows a slew of restrictions slapped on the online influencer community this year in a bid to clarify the brand-influencer relationship and regulate it.In March this year, IRAS sent letters to bloggers for the first time, stating that all payments and benefits derived from blogging and social media content creation is subject to tax. The move caused a stir in the community, prompting local social media agencies managing the community to call for more clarification.Some rules which were implemented mainly revolve around the declaration of goods and services worth more than SG$100. This includes paid meals, products, services or subscriptions, to name a few. Different scenarios are highlighted and addressed in a document here.The rule applies not only to blogging website but also to social media sites such as Facebook, Instagram, Twitter and the likes. Payments are taxable regardless of whether they are received directly from the advertisers, or indirectly through social media influencer companies.This was the first time the highly unregulated online community has received tax demands from the governing tax authority. The move was lauded by several industry players, who explained that top-tiered bloggers easily earned up to five figure sums for engagements.Local influencers were also recently targeted by the Advertising Standards Authority of Singapore (ASAS), which issued new guidelines to set the standards on advertising and marketing communication appearing on interactive and social media.The guidelines served to set the standards of ethical conduct and establish levels of disclosure required for sponsored messages appearing on social media. It will also prohibit false reviews engagement and dictate the clarity of the purchase process in e-commerce.The formation of the guidelines followed feedback received on 91 occasions in 2015 about advertisements that were seen on the Internet and personal mobile devices, compared to 45 in 2014.According to the feedback received, some consumers were misled by discounts and rates that were not as attractive as advertised, false depictions of products in pictures or questionable claims about product efficacy.