Note on Tax Implications for Bloggers, Influencers and Journalists of Goods being Provided for Review

Many members will have seen Colette Sexton’s article in the Sunday Business Post (January 29, 2017) entitled 'Taxing Times for Bloggers and Influencers'. The piece highlighted the potential taxation implications where product or services are provided to bloggers, influencers or for that matter traditional journalists.

Following the article, a number of members have been in touch with the PRII about what this potentially means for their interaction in this area. Subsequently, the PRII contacted the Revenue Commissioners who provided further details on the matters involved. The Revenue Commissioners pointed out that the vast majority of taxpayers are fully compliant with their tax obligations and under the self-assessment system, tax returns filed by compliant tax payers are accepted as the basis for computing tax liabilities.

However, the Revenue Commissioners went onto advise that it is aware of the potential tax implications posed by media marketing and on-line business in all its forms, including posts by bloggers, digital influencers, etc. Where a blogger operates on a habitual basis with a view to making a profit the blogger would generally be viewed as carrying on a trade for tax purposes and will be subject to income tax on the profits arising from that trade.

In relation to specific issues concerning products for review, etc. the Revenue Commissioners advise that where a blogger is in receipt of products, or other non-monetary benefits, in return for posting online promoting the product, they will be subject to tax on the benefits they receive.  The taxable value of the product/services will generally be the realisable value of the products/services if they were to be sold on the open market.

However, in circumstances where the blogger returns the product to the sender without delay then there should be no tax implications. This is irrespective of whether the benefit was solicited or whether the editorial was controlled or not. Obviously, any straight forward monetary payment provided to an influencer for an endorsement will be liable to tax.

In terms of the implications for traditional media, as a continuation of this principle in general any person or entity in receipt of products, or other non-monetary benefits in return for promoting or reviewing the product will be subject to tax on the benefits they receive, in the normal manner. The specific tax treatment of arrangements entered into by traditional media outlets in respect of product reviews will be dependent on the agreed terms entered into between the newspaper/magazine and the business whose product is being reviewed.

In terms of the implications for media organisations as against individuals who receive such benefits, the specific tax treatment of such organisations who receive products will depend on the circumstances in which the product was received including whether the product was received as consideration for the supply of a service. The tax status of employees of media companies will also be dependent on numerous factors including whether the product has been retained personally by the employee and whether any internal company policies exist regarding the retention of products for example. However, in general, benefits provided to an employee by a third party arising from, or in connection, with their employment will be within the charge to income tax.

As the PRII Guidelines on engaging with Social Media Influencers state:

“Provision of goods and services to influencers for trial and review is a normal part of public relations activity.”

This is consistent with the Revenue Commissioner’s position as articulated in the Sunday Business Post and in further comment to the PRII. The issue arises where the product is provided beyond what would be considered necessary for a review, and in those circumstances there would appear to be issues in relation to income or gift tax for the recipient.

Ultimately in any matter like this, the individual circumstances of the situation will vary and people will need to take their own professional advice.