Influencers in sights of ATO
CRACKDOWN ON ‘GIFTS’
THE ATO is coming for Australia’s multimillion-dollar “influencer” industry with a promise to tax glammed-up social media stars on gifts from companies, make them pay GST, and stamp out bogus deductions.
New Corp can reveal Australian Taxation Office staff have an arsenal of “datamatching” technologies to help them compare tax returns of “Insta-famous” people with the lifestyle and valuables in their online posts.
An ATO spokesman confirmed the fresh crackdown, saying: “If you are paid inkind, such as with goods or other benefits (for example, being able to keep an item or outfit used in a post, or being ‘gifted’ something) … you are subject to the same income tax and GST treatment as normal cash or credit payments.
“We have sophisticated data-matching and analytical tools that enable us to identify people that may be under-reporting their income from a range of activities.”
Influencers who make an income from their posts are required to pay tax, even if it’s just a hobby, and if they make over $75,000 they also have to register for GST.
The value of all “gifts” given to influencers in exchange for promotional posts must be declared as income. It is Australian law that influencers disclose publicly when they’re promoting “non cash benefits” by using the hashtags “ad”, “gifted” and “sponsored”.
Gifting is an increasingly common practice for businesses and public relations executives instead of cash payments.
“Cash is really simple but if you are gifted product in return for a service, it is much harder to police,” said one high-profile accounting executive, who did not want to be named. “It is a grey area … the tax office will say, take the recommended retail price, then you must pay tax on that but the key question will always be what is the benefit for the recipient if they have to pay tax on something that they don’t technically pay money for?
“It is well and good to walk around with a $5000 handbag but if you can’t afford the tax, what is the point? It is a gamechanger that will have influencers rethinking the situation.”
One celebrity agent, who also did not want to be named, was thrilled to learn of the crackdown, saying “the gravy train is over for influencers”.
Sydney influencer Suzan Mutesi was not surprised the ATO was clamping down.
“You have to adjust to the rules,” she said, “If you classify yourself as a sole trader, report how much you earn. I think just do it right because then it doesn’t bite you in the back later.”
According to the ATO, personal gifts given without the expectation of a service in return do not need to be declared for tax purposes.
Prominent influencers Jade Tuncdoruk, Olivia Molly Rogers, Jono Castano, Rozalia Russian, Chantelle Stanton, Lisa Danielle Smith and Lucas White Smith regularly use “ad” or “gifted” hashtags on their posts from luxe clients. News Corp does not suggest any of these names do not pay tax or make bogus deductions.