The South African Revenue Service (SARS) has once again appealed to content creators and social media influencers, demanding that they declare all income earned from their online activities. This includes earnings from sponsorships, brand partnerships, advertising revenue, and goods received in exchange for promotion.
This warning is driven by the tax authority's desire to improve compliance with tax legislation among digital content creators. SARS reminds that any income generated through online platforms is subject to taxation and must be declared, regardless of the number of followers.
The tax service stated that social media influencers and content creators who earn income from their activities are generally viewed by SARS as conducting commercial or entrepreneurial activity. Income derived from content creation, product or service promotion, affiliate marketing, advertising revenue, sponsorships, subscriptions, brand partnerships, and similar activities is typically taxable and must be accounted for for tax purposes.
Influencers operating as sole proprietors are required to declare their business income as part of their personal tax return along with any other sources of income. Furthermore, SARS warned that creators receiving payments outside of regular salary may have obligations for provisional tax. Provisional tax allows taxpayers to pay income tax in advance instead of facing a large bill at the end of the tax year.
SARS also emphasized the necessity of declaring non-monetary benefits received in exchange for content, promotion, or advertising. Such benefits include goods, services, vouchers, as well as travel and accommodation expenses. The tax authority strongly urged influencers and content creators to maintain proper records of their earnings and business activities, including contracts, invoices, bank statements, platform income reports, and sponsorship agreements.
Non-compliance can lead to fines
It is also necessary to keep track of goods and other benefits received as compensation for promotional work, and to retain proof or a reasonable valuation of their cost. SARS noted that tracking both monetary and non-monetary income helps in correctly completing the tax return and reduces the risk of inaccurate income declaration.
The tax service warned that creators who fail to file tax returns or pay overdue taxes on time may face penalties and interest. SARS advised making timely payments to avoid fines and interest, stating that payments can be made through SARS eFiling or via EFT in participating banks.
