LHDN clarifies taxation of influencer income under new guidelines

Social media influencers in Malaysia are now required to declare income from digital activities under updated taxation guidelines issued by the Inland Revenue Board (LHDN), effective 14 January 2026. The guidance provides detailed direction on what constitutes taxable income for both individuals and object-based influencers, including content creators, athletes, artists, and branded mascots.

The new rules cover revenue earned through a variety of activities, from content production and online or live event participation to brand promotions and collaborations. According to LHDN, taxable income includes direct payments from social media platforms, product ambassador fees, merchandise sales, royalties, paid appearances, and even non-monetary benefits such as gifts, discount vouchers, sponsored services, or digital appreciation tokens that have a monetary value. Payments received from overseas platforms are also taxable if the activities are conducted in, or tied to, Malaysia, regardless of the origin of payment.

Don't miss: Influencers, content creators to declare their income, says LHDN 

The LHDN categorises a social media influencer as anyone who influences others through digital platforms and earns income from such activities, either directly or in-kind. The guidelines provide illustrative examples, including revenue from seminars, subscriptions, video views, cross-border collaborations, and foreign brand promotions. Influencers are expected to file income estimates using form CP500, make advance tax instalments, and maintain records for a minimum of seven years for audit purposes.

The guideline further breaks down specific types of receipts. Direct payments from platforms can include revenue per click, per follower, per video view, or for content uploads. Income from product ambassador roles may take the form of cash or non-cash benefits, including goods, services, vouchers, or discounts. Influencers may also earn income from selling their own branded goods, digital products such as e-books or training sessions, or even from selling social media accounts. Royalties received for the use of influencer characters or images are taxable, as are payments for appearances as trainers, judges, or participants at events or ceremonies.

The LHDN issued the directive under Section 134A of the Income Tax Act 1967, providing the director general discretion to revise or withdraw the guidelines. This update signals a growing regulatory focus on the digital economy and underscores the importance for influencers to properly account for both cash and in-kind income in their tax filings.

In April last year, the LHDN had reminded individuals deemed as YouTubers, Instafamous personalities, influencers, or anyone earning income from paid reviews, to declare their income. Speaking to Bernama Radio, LHDN principal assistant director Syed Mohd Syukree Syed Mohd Kamil said that anyone who receives payment for their content or services are considered to be running a business. As a result, a failure to report such income within the stipulated period would be considered a criminal offence and can lead to legal action.

Failure to submit an income tax return form may result in a fine of between RM200 to RM20,000, or imprisonment of up to six months, or both, upon conviction. This is based on section 112 of the Income tax act 1967.

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