With the scandal widely publicized in the electronic media concerning individuals known primarily for their online activity, many of us learned who an influencer is (especially for the younger generation) and what their work entails. However, in this Monday's series, we're not addressing criminal law, the law of new technologies, or labor law, but taxes (for those interested in other topics, I recommend the series: Compliance, Technology, and On Work After Work). Let's consider how to account for income generated from influencer activities.
First, it's important to note that influencer revenue can come from various sources. Let's analyze the three most popular: affiliate collaborations, advertising, and donations. If the person earning this income runs a business, they account for the revenue generated through that business (with the exception of some donations, which are discussed below). However, let's consider what happens when the revenue is earned by someone who doesn't run a business.
Affiliate collaboration and advertising
Affiliation involves recommending a specific product or service in exchange for a portion of the sales revenue. In its simplest form, an online presence posts a link to the seller's store or receives a special code. If a customer makes a purchase by accessing the online store through the shared link or using the code, the person sharing the link receives an agreed-upon remuneration (either a fixed amount or a percentage). The more popular the person sharing the link, the larger the pool of potential customers for the online store.
The method of settling income from affiliation depends on the agreement entered into with the seller. If the affiliation is based on a contract of mandate, the client collects and pays income tax advances and submits the PIT tax return to the contractor at the end of the year. The contractor settles the earnings by the end of April of the following year, just like income from employment.
However, it may happen that the person sharing the link with the seller enters into an agreement with them to lease advertising space (e.g., on a blog). Revenue from such an agreement must be accounted for individually. Taxation can be applied either according to general rules (tax scale) or at a flat rate (8.5% on revenues up to PLN 100,000 and 12.5% on any excess over PLN 100,000).
However, if income comes from abroad, it's worth keeping in mind that it may also be taxed in the country of origin. Therefore, it's important to familiarize yourself with the double taxation treaty between Poland and the country in question.
Income generated from advertisements displayed under a creator's videos on sites such as YouTube should be taxed in a similar manner.
It's important to remember that revenue is generated when money is received. Earning points in an affiliate program, for example, doesn't generate revenue. Revenue is generated only when the points are exchanged for cash.
Donejty
The very name "donate" may evoke associations with a donation (originally from the Latin word donare, meaning to give). However, this association is not always accurate. Donate is a form of money (cash, points, or virtual tokens) transferred to an online creator. If such a creator receives a payment to their bank account from a fan, they receive a donation, which is subject to the Inheritance Tax Act, regardless of whether the influencer runs a business or not. If donations received from a single person (unrelated to the recipient) do not exceed PLN 5,644 over a five-year period, they will not be subject to tax. Donations exceeding this amount will be subject to gift tax.
However, if the donation involves purchasing points (tokens) from a given creator or gifting them previously purchased points, then that person earns income from their own business. This may result in an income tax liability. This tax should be calculated on a tax-deductible basis.
The tax treatment of income from online activities depends on the type of agreement between the influencer and the platform owner. It's important to note, however, that the name of the agreement itself won't be decisive for tax authorities. Its content is more important. Furthermore, the platform owner may collect withholding tax (depending on the tax regulations in a given country). Therefore, before commencing such activity, it's worth thoroughly reviewing the platform's terms and conditions, as well as the relevant double taxation treaty.
This article is for informational purposes only and does not constitute legal advice.
Legal status as of October 23, 2023
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