The boom in Internet marketing makes it possible for influencers and bloggers to turn their hobby into a job: They generate (not just minor) income from insights into their lives, their wardrobe and their everyday lives. But how is this income taxed?
In this article, we give you a brief overview of the taxation of influencers and bloggers. We are happy to answer your questions and provide advice — even if, following a tax audit, proceedings are already under way by the tax office.
What all counts as income?
First, it is necessary to define what income an influencer earns. Items that are made available free of charge for advertising — sneakers, cosmetics, laptops, etc. — can also represent income.
In the Income Tax Act, income is defined as follows:
Revenue is all goods that consist of money or monetary value. They must also accrue to the taxpayer as part of one of the types of income.
The legislator then differentiates income into two categories: income from freelance work and income from commercial enterprises.
The subtle difference: trade or free activity?
Income from freelance work is earned in accordance with Section 18 EStG, provided that the writing, artistic or teaching aspect prevails within the scope of the contribution. However, most income is likely to be generated from industry in accordance with §15 EStG. This is because testing and advertising products is regularly classified as a commercial activity by the tax office.
Influencers like to use links. Through these links, followers can then go directly to the websites where the products can be marketed and ordered. Influencers receive a commission per order. As an example, these commissions also represent regular income from commercial enterprises.
Generating this income and thus business income (profit) may result in the payment of business taxes if the allowance of 24,500€ (as of 2022) is exceeded.
Are you subject to business tax?
Business taxes are deductible against income taxes. In accordance with the Income Tax Act, natural persons are subject to income tax liability with their income. The income tax itself covers non-entrepreneurial and entrepreneurial income, with the income representing the respective profit. The basic allowance in 2022 is €9,984.00 for the individual assessment and €19,968.00 for the joint assessment.
If, on the other hand, the activity as an influencer or blogger is achieved in addition to a main activity, there is an exemption limit of 410.00€ in accordance with Section 46 II No. 1 EStG.
We therefore recommend that you coordinate with your tax advisor at an early stage or ask the tax authorities how your income is classified.
Depending on the extent, profit must be determined by calculating profit using a so-called income surplus statement or a comparison of operating assets. It is determined by occupation-specific so-called operating income and expenditure.
What all counts as operating income?
In particular, influencers and bloggers receive fees after invoicing, the commissions already mentioned above from linking to the products, so-called affiliate links, widgets or banners.
In addition, products (e.g. cosmetics, sporting goods, laptops, clothing, etc.) can be operating income if they are advertised on one's own profile and may be retained in return. If, on the other hand, you only receive the product for testing and have to return this product afterwards, this is most likely not an ingestion. Also pay attention to gifts worth more than €10.00: These can also represent operating income under special conditions.
When using these acquired products for business purposes, these objects (such as a laptop) may represent fixed assets and are subject to so-called depreciation. If such an item is sold subsequently, income is also generated from it.
What are my operating expenses?
Operating expenses can be deducted from so-called operating income. But what operating expenses can you claim as an influencer or blogger? And how do you ensure that these expenses are recognized by the tax office?
Operating expenses are all expenses initiated by the company. On the other hand, private living expenses are not deductible. For influencers, however, the two areas often overlap — and this is where things can get difficult.
Expenses for bookkeeping, the costs of your own homepage, business cards, costs for a photographer or studio rent will be unproblematic. Internet and telephone costs then become problematic when they represent both business expenses and private expenditure, as there is only one connection. This requires plausibility and reasoning.
Because of the existing problems of expenditure, whether these are operational or private, it is necessary to document in detail for each blog post or every shoot or shoot which objects, clothing, cosmetics, locations, etc. have been used and whether travel expenses or travel costs have been incurred to what extent. E-mails with the client or the company that sent a product to advertise must be kept as proof of a shoot, for example. In this respect, your tax advisor and/or even the tax office can understand the operating expenses or determine a quota operating expenditure. A blanket attribution to private living could be counteracted in this way.
The small business regulation
Sales tax issues may also come up if you, as an influencer or blogger, exceed certain turnover limits as a small business owner in accordance with § 19 UStG (if a maximum of 22,000.00 sales were generated in the previous financial year and the turnover in the current financial year is not expected to exceed 50,000.00€). As a so-called small business owner, there is no need to submit the advance return for sales tax and also to show the sales tax in the invoices. However, a corresponding note must be included in the invoices. However, it is disadvantageous in this respect that no input tax amounts can be deducted either.
You should therefore discuss with your tax advisor whether this small business regulation represents an advantage for your company.
