Bloggers taken by surprise by IRAS letter on taxable income
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Some members of Singapore’s blogging community have expressed surprise at a letter they have received from the Inland Revenue Authority of Singapore (IRAS) clarifying income components - including products or services received via their websites - which need to be declared as part of their annual Income Tax Return.
938LIVE has seen pictures of the letter in question. The memo states that all non-monetary benefits, including sponsorship of products or services received in return for writing or reviewing the sponsors’ products “may be taxable and must be declared”.
Prominent blogger Wendy Cheng, or Xiaxue, told 938LIVE this is the first time she has received such a letter from IRAS.
Ms Cheng said while she is aware that income generated from her website is subjected to tax, it is “difficult” to declare certain benefits-in-kind.
“If someone sends me a lipstick, am I supposed to go find out how much it costs and declare it? Other things like, for example, some fans give me something that’s handmade, how do I put a value on that?”
“Either that or I have to send it back to the company, but that’s very nasty. It’s like saying: 'I don’t like your product', so it doesn’t make sense to me,” she added.
The IRAS letter sent to bloggers
Kenneth Lee, who blogs on www.5meanders.com wrote: “I think it’s sad, and a little funny, that we’ve come to a point in our country’s storied existence when a channel of expression is taxable.”
938LIVE understands that IRAS sent the letter as sent as part of its regular engagement with the self-employed and is not meant to target or clamp down on bloggers.
Social media marketing firm Gushcloud said it is aware that the letter has been sent to bloggers under its management, adding that it regularly holds workshops and 1-on-1 meetings to answer their questions on the filing of their taxes.
A food blogger who declined to be identified said he has always been aware of the need to declare the benefits he received through his blog.
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LOL... well its Singapore gov after all ... they need money
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who agrees that bloggers (with income) should be taxed?
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As long it crosses a treshold, yes.
Advertisement counts as a source of income but, indeed, endorsement of items. How to even put a price on a gift?
It's sort of a grey area...
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Originally posted by ^Acid^ aka s|aO^eH~:
As long it crosses a treshold, yes.
Advertisement counts as a source of income but, indeed, endorsement of items. How to even put a price on a gift?
It's sort of a grey area...
small small value items no need declared lah... those bigger value items have to declare...
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Good!
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bloggers with derisory income (read: 5k/mth) don't need more tax
how many of these bloggers are part of the 70%?
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IRAS Wants Bloggers To Declare Sponsored Items: 2 Reasons Why That May Be Impractical
This article was originally on GET.com at: IRAS Wants Bloggers To Declare Sponsored Items: 2 Reasons Why That May Be Impractical
It is tax season in Singapore right now. This is the time of the year when eligible income earners scramble to file their taxes or risk paying a penalty should one under-declare or forget to declare, whichever the case may be.
If you’ve been keeping up with local news lately, our taxman has caused much distress for our Singaporean social media darlings who make tons of money and receive more than enough products to last a lifetime doing the fun and ostensibly glamorous things that they do, by sending them a memoregarding declaration of sponsored items received. Without favouring any side, here are 2 reasons why we at GET.com think this requirement may be impractical.
1. There Are Just Too Many Loopholes
It doesn’t take a prodigy to realise that there are simply too many loopholes out there to render IRAS’ efforts in tracking down tax returns 100% foolproof.
According to IRAS’ FAQ for social media influencers, they’ve made clear that the income somebody “received from social media marketing activities such as blogging, YouTubing, etc. will be assessed as self-employed income once it is ascertained that you are carrying on a trade or business”.
Well, does this mean that IRAS will be working hard to keep tabs on who is active on social media making a living out of it and who’s not?
Seriously, there are so many small-time bloggers and Instagrammers across the globe and in Singapore - how is it even possible to track down every single one of these bloggers or “social media influencers” regardless of their popularity and/or outreach?
Good luck to whoever’s been tasked to trawl the internet and various social media platforms where such marketing activities are carried out!
Besides, many social media influencers attend events, invites, overseas trips and receive all sorts of perks and products provided to them by brands’ own initiatives, how are they supposed to remember which ones they’ve been to, how much a meal at a fancy gastropub costs, how much a limited edition jacket or a swanky hotel room costs, etc?
2. Inefficiency Is Not Cool
As though keeping up with making money and surviving in Singapore isn’t tough enough already, this clause that’s recently in the spotlight is set to create a lot more inefficiencies. And inefficiencies are bad because there are costs and opportunity costs involved.
Not only does the taxman and his squad need to spend sizeable amounts of time and energy tracking down bloggers and ensuring that whatever is being declared is accurate, busy social media influencers have to set aside time to slowly scour through the back of their heads (or emails, messages, calls, skype conversations and what have you) recalling how much each taxable sponsored item costs.
Will this be a case of a tax law that costs more to enforce than what it can bring in in terms of tax revenue?
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advertisement revenue I can understand, but sponsered products abit too 过分 sia...
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or they recently eat too foo?
