If you’re a budding blogger or social media influencer, taxes may be something that you might not be too familiar with. This is a common issue even for entrepreneurs and e-commerce businesses in Singapore. Yet, bloggers are also subject to taxation and it is important to know what they are so that you can plan accordingly.
This guide will help you understand what the tax compliance process entails for you as a blogger and how you can prepare for them.
Yes, if your annual net business income is above $6,000, you will be required to declare this as self-employed income.
According to the Inland Revenue Authority of Singapore (IRAS), this includes any income received from activities performed on social media platforms such as Instagram, Twitter, Facebook, YouTube, placing of advertising banners on blogs, etc.
Any monetary payments or non-monetary benefits-in-kind from such activities will be taxable as well. This is regardless of whether blogging is a part-time hobby or a full-time job for you. You may also be notified by IRAS via email as a reminder to file by the deadline (15 April for paper filing, 18 April for e-filing) so do keep a lookout. As a precaution, you can still do your due diligence to check your filing requirements if you have not heard from them.
That being said, there are certain items that are exempted from income tax. Non-monetary benefits such as complimentary items, gifts and products or services received are not required to be declared and not subject to tax as long as they meet the following two conditions:
Otherwise, the full product or service of more than $100 should be declared when you are filing your tax. If the product or service received is a recurring supply over a period of time, even if the value of each product or service is not more than $100, it is still required to be declared and subject to tax.
Fortunately, expenses that are deemed “wholly and exclusively incurred” during the period in the production of income can be claimed as tax-deductible expenses. Examples include marketing cost to promote social media posts, cost of maintaining a website, subscription fees for software used in the business, staff payroll etc.
This is in accordance with Section 14 of the Income Tax Act (ITA), provided that these expenses are not prohibited under Section 15 of ITA such as private expenses, capital expenses, private car expenses even if the car is used in the business.
After all the deductions have been accounted for, only what remains will be considered chargeable income to calculate your tax.
Moving forward, you will need your Singpass to log into myTax Portal to declare your income and submit your income tax returns by the filing due date. Take note that there are penalties for late-filing or non-filing of tax returns. For bloggers in Singapore, engaging someone with expertise in this area can be a smart decision to help you handle your tax transactions with IRAS.
The knowledge and experience of an accounting service provider can help you avoid costly mistakes and they will be able to answer any questions that may arise during the process. As you focus on building your online community, you will also feel more at ease knowing there’s someone on your side assisting you on the financial side.