The recently released guidance on tax treatment for influencers by the Irish Revenue Commissioners (“Irish Revenue”), Part 04-01-22 on Taxation of Income from Social Media and Promotional Activities and The VAT treatment of Social Media Influencers, meaning that PR, free gifts and experiences are now firmly on Revenue’s radar, and unreported collaborations can lead to tax trouble for influencers, and brands engaged in influencer marketing.

Influencer marketing is no longer a developing and informal industry, but a thriving sector and a significant way for brands to reach online audiences. But this also means that both creators and brands, are expected to follow clear compliance standards as the industry grows. 

Below we break down why tax authorities are tightening compliance around influencer activity, and what this means for creators, and the brands they work with. 

1. Influencer Marketing Has Become a Major Advertising Channel 

Influencer marketing is now a core part of digital marketing, and a fast-growing channel with the industry expected to hit $32 billion in 2025. As more brands shift their marketing budgets towards content creators, the attention of tax authorities also turns this way, as more commercial collaborations happen on public platforms.

2. Free Gifts and Experiences are no Longer Considered Part of the "Favour-Based Economy" 

Tax authorities have recently clarified that"gifts sent in exchange for promotion, are considered taxable (income) at their market value"- this includes, (but is not limited to): 

• Hotel stays
• Meals
• PR trips
• Flights 
• Products 

The tax treatment hinges on the expectation of promotion, not whether cash actually exchanged hands. 

3. Social Media Has Become a Public Record of Commercial Activity

Tax authorities don't need to inspect private communications, when influencer marketing is a publicly visible activity through online actions such as: 

• Unboxings
• Hashtags, such as #ad & #gifted
• Affiliate links and codes 
• Brand tagging 

This digital record serves as an audit trail, and is why the industry is now attracting greater investigation by tax authorities, as the evidence of promotional activity is already public. 

With the introduction of these new rules, the admin burden falling on creators and brands has increased significantly. Tracking gifts, valuing items, saving proof of deliverables and storing records for up to six years only adds to the workload. 

However, Irish content creators and brands don't have to get out the spreadsheets just yet, the good news is, all of this can now be done automatically with AnotherTrip, the new collaboration management tool for content creators, and businesses engaged in social media marketing. 

AnotherTrip now provides content creators and brands engaged in influencer marketing with; 

✔️ Fully exportable audit packs.  

✔️ A dual-invoicing system (keeping brands and influencers ahead of their tax obligations). 

✔️ Automatic checks of all previous content for collaborations and gifts, and compiles records automatically. 

✔️ Generates fair market valuations of all gifted items. 

All provided in a single secure dashboard, to keep influencers and the brands they work with on top of their tax obligations. 

Information provided courtesy of the Revenue Commissioners under a Creative Commons Attribution 4.0 International (CC BY 4.0) licence. 

The above service and information is not affiliated with, associated with, or endorsed by Revenue. It is an independently developed resource. The information contained in this article is intended for educational use only and should not replace professional advice. AnotherTrip advises to seek support from a qualified tax advisor for any specific queries.