Blogger Income Tax in Singapore and Proper Disclosure of Sponsored Posts: What I Learned at an Advertising Standards Authority of Singapore (ASAS) Seminar
As a blogger and social media influencer in Singapore who works with brands on sponsored posts and receives income for it, I want to be well-informed on the taxation and disclosure guidelines set by the authorities in Singapore.
When I received the invitation for the “Ethically Viral” Seminar organized by ASAS, I was excited!
This meant that I could finally sit down and get all my questions and concerns answered and sorted out.
Disclosure: This blog post is a summary of what I learned at the seminar and is in no way to be read as legal tax advice or as an official statement from ASAS or Inland Revenue Authority of Singapore (IRAS) in Singapore.
To get the most updated information, do refer directly to their websites or contact them for clarifications.
Without further ado, here are my notes on the seminar:
Proper Disclosure of Sponsored Posts
The key thing that the ASAS wants is proper disclosure when a post is sponsored.
It should be made reasonably obvious to consumers when a post is sponsored.
Use these four principles when crafting and posting sponsored posts:
Building trust is the key to having success in social media advertising.
Statistics show that people’s trust in traditional media experienced the steepest decline and that owned Media is now as trusted as media as an institution.
In Singapore, online and social media are the main sources of news as compared to print media, TV, and radio.
Important Info about the Blogging Income Tax in Singapore - applies to Social Media Influencers and Bloggers
Income tax obligations for social media influencers and blogger in Singapore:
- Submit Income Tax Return
- Must report a complete and accurate set of business income
- Comply with Income tax laws
- Keep proper records and accounts for 5 years.
Definition of "Blogging Activities": It refers to any activity performed on social media platforms such as Instagram, Twitter, Facebook, YouTube, place of advertising banners on blogs, etc.
Take note: If blogging activities are performed repeatedly in exchange for monetary or non-monetary benefits where the annual net business income earned is more than S$6000, this income should be declared as self-employed Income.
If you are a Singapore Citizen or Permanent Resident (PR) and earn more than S$6000 a year from blogging activities, it will be compulsory to contribute to Medisave as well.
IRAS will issue a Notice of Computation (NOC) to inform you about your Medisave contributions.
Any monetary payments and benefits received from blogging activities are taxable.
On the other hand, non-monetary payments and benefits (which includes sponsorship of products or services received in return for writing about or reviewing the sponsor’s products) may be subject to tax if they meet the criteria.
Non-monetary payments and benefits (like sponsored products and services) are only taxable if:
A) Value of the product/service received exceeds S$100.
B) Recurring supply is provided over a period of time.
Any monetary or non-monetary benefits provided to the families and friends of the social media influencer will be taxable on the social media influencers.
The speaker from IRAS, Ms Elti, gave an example of influencers who go for food tasting and invite family and friends along for the meal.
Allowable expenses that are tax deductable:
- Must be related to your business
- Must be allowed by tax laws
- Must be incurred during the basis period in the production of income
Examples of allowable business expenses:
Cost of maintaining a website,
Internet subscription fees,
Payment to freelance writers for writing the blog posts,
Expenses incurred on items or food for review, provided that you earn from doing the review.
Disallowable expenses that are not tax deductable:
- Capital in nature
- Prohibited by tax laws
- Personal and private in nature
Maintenance cost for private cars,
Food for personal consumption & household expenses,
Entertainment expenses for family & friends,
Fines for breach of law.
There is a page on IRAS’s website dedicated for providing social media influencers such as bloggers and Youtubers with tax information.
Proper record keeping in case of audits and How to submit your blogger income tax return on IRAS's myTax Portal
Must keep proper records of the below for 5 years:
- Source Documents - Invoices, Receipts, Payment Vouchers
- Bank Statements - Used solely for business purposes. Maintain separate bank accounts for business and personal purpose.
- Accounting Records and Schedules - General ledgers to record income and expenses, sales listing, details schedule of expenses.
- Any other Records - Business contracts, record of advertisers, sponsors and social media companies.
Set up a good filing system for your paperwork from the start of your blogging business and make sure that your records can be easily understood by anyone.
Ensure that you obtain the necessary source documents at time of transaction and enter transactions regularly and accurately to keep records up to date.
Record business expenses separately from personal expenses.
You are required to submit a tax return by 18 April every year if you receive:
A) Annual net business income derived from Singapore of more than S$6000.
B) Annual income derived from Singapore of more than S$22,000 (includes employment, rental, etc).
When filing tax online on myTax Portal, declare blogger income tax under “Trade”, not under “Employment” or “Other Income”.
Do not file estimated income or claim estimated expenses. Everything should be accurate and based on actual amounts earned/ incurred and supported with invoices, receipts, etc.
If your annual revenue is equal to or lower than S$100,000, you only need to report your blogging income in a 2-line statement:
- Adjusted Profit/Loss
If your annual revenue is more than S$100,000, you need to report your blogging income in a 4-line statement:
- Gross Profit
- Allowable Business Expenses
- Adjusted Profit/Loss
If your annual revenue is equal to or more than S$500,000 then you need to report your blogging income in the 4-line statement with the addition of a Certified Statement of Accounts (i.e. Profit & Loss Statement, Balance Sheet).
Penalties may be imposed for the following offenses:
- No proper record keeping
- Failure to submit income tax return
- Furnishing an incorrect income tax return
- Tax evasion
Penalty varies from a fine to imprisonment depending on the nature and severity of the offence.
IRAS has a Voluntary Disclosure Programme to encourage taxpayers to come forward voluntarily to correct tax reporting errors in exchange for reduced penalties, subject to qualifying conditions.
If you make a timely voluntary disclosure within the 1 year grace period from statutory filing date, there is no penalty imposed.
If you make a voluntary disclosure after the 1 year grace period, there will be a reduced penalty of 5% per annum on income tax undercharged.
IRAS is increasing their efforts to educate social media influencers and bloggers about the need to file their income tax and how to go about doing it.
Previously they have sent letters to prominent social media influencers bloggers in Singapore to educate them about their blogging income tax obligations.
There you have it, important info about proper disclosure of sponsored posts and blogger income tax! :)
I hope you enjoyed reading my post on "Blogger Income Tax in Singapore and Proper Disclosure of Sponsored Posts: What I Learned at an Advertising Standards Authority of Singapore (ASAS) Seminar".
How do you communicate clearly to your readers that a post is sponsored?
What are your favorite tips to make tax filing season easier?
What tips do you have to build trust on social media?
Share your answers with me by leaving a comment below.
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