Here’s how to pay your taxes as an influencer

Influencer might not have been a word in your vocabulary a few years ago, but today, more and more people are turning their social media feeds into sources of income. Despite being a relatively new profession, the Spanish Tax Agency has already been monitoring influencers closely, since it is considered to be a new economic activity for which they receive compensation.

Influencers are now legally obligated to specify when a recommendation is an advertisement  so that their audience knows when they’re being compensated for a promotion. But the legalities don’t stop there. Influencers also have to record and register their income with the proper authorities, just like any other profession. They even have to declare non-monetary income, like cars, bags, and all the other freebies they bring home. From a taxation point of view, the Treasury is entitled to its share. The main source of confusion is that there are currently no specific tax regulations for advertisers on social media. Despite this lack of specific rules, one thing that is clear is that influencers must fulfill their tax and social security obligations, just like any other worker. 

Next we’ll explain the best way to handle your taxes as an influencer. 

As an influencer, the first thing to know is that the most common way to declare your income is by registering as a freelancer. This means you will have to pay a certain Social Security contribution each month, which currently stands at €50 per month for the first year of activity, rising to €286.15 afterwards. In addition to Social Security contributions, freelancers also have to pay personal income tax (IRPF) on their annual tax return, and VAT from their invoices every quarter. If you do decide to become a freelancer in order to work as an influencer, you must register under professional category 751 (advertising, public relations, or similar professional). 

But registering as a freelancer is not the only way to pay your taxes if you’re working as an influencer. Let’s say things are going well and you’re starting to generate more income than expected. Inevitably, this comes with higher taxes. If you find yourself in this situation, it might be better for you to form your own company. Your profits would then be subject to corporation tax at an effective rate of 25%. For the first two years, you can benefit from a reduced rate of 15%, since this is the rate the Tax Agency applies to new corporations.

No matter what type of influencer you choose to become or how much money you earn, keep clear and organized records of all your payments and expenses. You’ll be glad you did when it’s time to do your taxes. 

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At N26, we have four types of interest-bearing business bank accounts: the free N26 Business Standard account, the next-level N26 Business Smart, or the premium N26 Business You and N26 Business Metal accounts. All of these include cashback of between 0.1% and 0.5% on every purchase you make using your N26 Mastercard. And since we are the first neobank becoming a collaborating entity with the Social Security system in Spain you can collect your benefits in your N26 account and also pay your freelancer tax and make other payments to the administration through us.