Whether on Twitch, Instagram, YouTube, TikTok, or yes – even OnlyFans, Canadian influencers are certainly making a name for themselves on social media, both in rapidly growing follower counts and revenue earned through online platforms.
For example, take body-positivity blogger Sarah Nicole Landry, @thebirdspapaya, who has over 2M Instagram followers (who earns income through paid partnerships with global brands like Old Navy, sponsored affiliate links, and podcasting ad revenue) and Toronto-based YouTubers Yuri Tereshyn and Jakub Wrobel - better known as TheStraightPipes who boast an impressive 1.3M subscribers on their popular car reviewing channel and can bring in a substantial amount of income in just video ad revenue alone.
While the exhilaration of digital fame is certainly worth celebrating, the excitement can also often overlook critical tax responsibilities to the Canada Revenue Agency (“CRA”).
The CRA has been keeping a closer eye on influencers across all social media platforms to ensure they are fulfilling their tax obligations through monitoring content to spot any apparent signs of wealth or gifts. For instance, if an influencer declared only $1,500 CAD in annual earnings on their tax return, but posts an Instagram video showing off their collection of Hermès Birkin bags, the CRA may raise questions.
Influencers could be subject to (but not limited to) reporting the following types of income streams:
As such, influencers are often considered to be earning revenue (and would have resulting tax liabilities) from non-monetary compensation (or barter transactions – when there is a reciprocal exchange of goods or services that does not involve the exchange of money).
The CRA has the ability to garnish your wages and cash in your bank from other income sources, seize and sell your assets, or use any other means under the law to collect the tax you owe (or they think you owe, if you do not file at all).
The consequences of incorrectly filing or neglecting to file your income tax returns can be dire. Make sure you keep these important filing dates in mind:
In addition to income tax, sales tax, known as the Goods and Services Tax or Harmonized Sales Tax (“GST/HST”) in Canada, must be considered on income generated through social media platforms.
Consulting with a business management and tax professional up front will help you optimize and manage the business-side of your social media career, which will ensure any CRA action is mitigated. Among many things, these advisors can:
A skilled team of experienced professionals can relieve you of these urgent financial concerns, while you focus on fostering your passion for creating engaging content and strengthen relationships with your audience.
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