In recent years, social media influencers in Ireland have come under increased scrutiny from the Revenue regarding their tax obligations.
Since 2023, over 450 influencers have been sent letters reminding them to declare income from online work, including gifts and services received in exchange for promotions.
Paul Merriman, CEO of Fairstone Ireland, described the letters as a “gentle nudge” to influencers.
He said he was surprised at the relatively low number of notifications: “In fairness, I’m surprised it’s only 450 letters; the letters started coming out in 2023. So, nearly two years now and there’s only 450 letters?”
A lot of influencers may not realise that gifts received in exchange for promotions are considered taxable income.
Mr. Merriman explained: “If they are receiving gifts, if they are promoting goods online in lieu of payment, they will have an income tax liability in most cases.”
He further clarified that gifts used personally without promotion might fall under the small gifts exemption, which allows up to €3,000 without declaration.
He explained the rules as follows: “The big thing for people that are on social media as influencers that are bringing in gifts or income, is that they do need to make a declaration to the Revenue in most cases.
“There’s a couple of rules to go through here quickly.
“Up to €5,000, you just have to go onto the Revenue site yourself, into the MyAccount section and put in the up to €5,000 and pay your tax.
“If it’s more than €5,000, you’re going to have to do what’s called a Form-11 and actually submit that tax return to the Revenue Commissioners.”
Tax adviser Alan Purcell of CloudAccounts said that the number of letters issued is lower than expected, considering the vast number of influencers.
He highlighted the importance of declaring all forms of income, stating, “All income is taxable.”
To be able to deal with these tax obligations effectively, Mr. Merriman advises influencers to ask for professional guidance and said: “It’s very, very, very important to get professional advice.”
As the influencer industry continues to grow, understanding and adhering to tax responsibilities is so important to avoid potential liabilities and to ensure you’re in compliance with Irish tax laws.
