Influencers & content creators

Influencers earn income from product reviews, sponsorships, or brand promotions through online channels (affiliate marketing). The area that needs special attention is correctly classifying "income type," since each income category has a different allowable expense deduction rate — and products received in lieu of payment from brands also count as income that must be taxed at market value, not as tax-free gifts. Overlooking these points can affect both accounting and tax as follows:

• Misclassifying your income (for example, filing under Section 40(2) when it should be Section 40(8)) can mean claiming the wrong expense deduction rate, causing you to pay more or less tax than you should.
• Failing to record the value of products you receive as income can lead to a retroactive tax assessment from the Revenue Department, plus surcharges.

1. Should your income be classified under Section 40(2) or 40(8)?
2. Have you recorded the value of products you receive from brands for review as income?
3. If you have real expenses — such as photographer, makeup, or hairstyling fees — are they recorded separately so you can deduct them based on actual cost?
4. Is the withholding tax deducted by each sponsor at the correct rate?
5. Has your total annual income reached the threshold requiring VAT registration?