Do you earn money with your social media channels or do you sometimes get free products because of your work on social media? If so, the tax office usually wants to know and you should definitely watch this video to the end. Hi, my name is Melchior from Kontist Steuerberatung and earlier this year a Chinese influencer was fined 186 million euros. This sum is absolute madness – almost 200 million euros in fines for not correctly stating income or stating it incorrectly.
Admittedly, these are really high amounts. But in Germany, too, the tax office is interested if you generate income with your social media channels, be it YouTube, Twitch, Instagram, TikTok or OnlyFans. If you generate income with these platforms, with corporations, with companies or they even "give" you free products, you have to declare this to the tax office and usually also pay taxes. And you can actually become an influencer faster than you might think. For example, if you're on vacation, post with a link to the hotel, i.e. the hotel's corporate account, or if you have a new dress, new shoes or children's toy, use and show the product and then link the manufacturer account, you're already halfway to being an influencer. If you now also get the product cheaper, for free or even paid for by the company, you have to mark this contribution as advertising and usually actually pay taxes on this income.
If you are regularly on social media, you know a few methods of how advertising works, for example. First, there are the so-called “affiliate links”, for example for online shops, where there is a specific link and the influencer may also have their own landing page, or discount codes. For example, if I advertise an online shop for dried fruit or mattresses and I offer you a 10% discount, this discount code is usually there so that the online shop can track where the order came from. This means that the mattress manufacturer then knows exactly that the order came from me and my reach, and then there is usually more than just this discount for my followers, namely a payment for me. And it can all be lucrative. From 1,000 followers, you can earn several hundred euros per month and if you have hundreds of thousands of followers, your earnings are usually in the five-digit range per month if you do it well. And this probably won't surprise you, but affiliate links and discount codes can also be recognised by tax officials.
Of course, the tax office also knows social media platforms and they also regularly look through the accounts and see who is actually advertising for whom, then report this to the responsible tax office and they can then see whether this income has also been taxed. If you now think to yourself: "Crap, I also have a social media channel and sometimes I get products or money transferred from companies", you absolutely have to do the following things. First, you should definitely register a business with the responsible tax office.
Second, you should fill out the tax registration questionnaire to get a tax number. I have already included a very detailed tutorial on how you can get a tax number from ELSTER Online. I'll put a link to it for you here at the top right. And then you have to declare all your income and do your bookkeeping ongoing. And on your income, i.e. on the profit, you then have to pay income tax and trade tax. In addition to income and trade tax, the VAT is also relevant for you, since you have to show 19% VAT on the invoices that you write to your customers, i.e.
To the companies, and pay this 19% to the tax office. However, you can usually offset the VAT that you charge your customers against the VAT that you are charged. For example, if you buy a new camera from Sony and it costs 1,190 €, that is 1,000 € net + 190 € VAT. That's exactly the same. And you can offset that against one another and then only have to pay the difference between the VAT that you received and that you paid to your suppliers to the tax office.
That can be very good. For example, if you had higher investments, you even get money back from the tax office. When you say to yourself: "It's all too much work for me" and you make less than 22,000 € per year, you may also qualify for the small business scheme. This means that you can then do without it completely and you will then be a small business owner and write your invoices without VAT. In return, you are not allowed to offset the VAT that was billed to you. Then you just calculate the gross amounts. It is definitely easier in terms of bookkeeping, but can also be financially disadvantageous in some cases. So far, so good, I would say. I think that being an influencer is basically a separate, independent activity and that if you have received money from someone, you should pay tax on it, which shouldn't really surprise many of you.
However, where many people do not know exactly whether this is actually correct is with gifts. I know from my own experience that if you have a little reach on social media, it's very, very easy to get gifts from companies, whether it's a vacation, a discount, any kind of dried fruit, beauty product, or discount. Or if I say in the restaurant that I'm sharing, that I'm here and boom, dinner with my friends is free. Or I suddenly only pay 300 € instead of 1,200 € for the leasing installments for my new Mercedes. Companies only do all this because you provide something in return, i.e. with the intention that you will advertise this company. And so these discounts or gifts are also taxable. Business income doesn't have to be money. You don't have to get money into the account in order to have to pay taxes, they can also consist of so-called "monetary values".
If you get products and services for free or with deep discounts, that's also business income that you have to pay tax on. The whole thing is the operating income side. However, you can also offset expenses from the income, i.e. what money or to what monetary value you receive. What costs did you have to generate this income? These are the so-called “operating expenses”. Of course you can deduct that. You only have to pay your tax, i.e. your income and trade tax, on your profit. And if you now buy software, you need equipment for the study, you need an expensive PC for your stream, for example, or even if you have travel expenses for certain shoots, you can offset all these costs. It is important, however, that you have to deduct the private use portion. If I assume that I do cooking tutorials on Instagram, cook something every day, share the recipes and earn my money from it because I get sponsorships from Hello Fresh and Rewe and cooking utensils and whatever else I can think of.
The tax office can still go there and say: "Well, you can't claim the entire cost of your food as a business expense because we assume that you will eat this food afterwards" and the food is just outside of the video production. This means that you cannot deduct the entire cost, but only part of it. And you then have to calculate out a private consumption share and may not deduct it as a business expense. Ideally, you should discuss exactly how to calculate the private usage share with a tax consultant and how you can document this for yourself. I hope that this video has given you as an influencer a first rough insight into the whole topic of "accounting and tax returns".
If you now say: “This is all interesting, but I don't want to do it. I actually want to have a tax consultant who takes care of my bookkeeping and taxes”, I would recommend that you take a look at our offer. We are specialised online tax consultants for freelancers and the self-employed and already look after a number of influencers. I'll put links to all the information about our offer here. Be sure to check out our online community. How exactly you can register, what that is etc. you will find out in this video. Or watch another of our videos, e.g. this one. Or have baby toys or clothes or, I can't think of anything else..