Influencers - Tax pitfalls in the case of self-marketing

Individuals who, as influencers, generate their income by promoting products or lifestyles in social networks should be aware of the tax pitfalls that are associated with such an activity.
Recently, the Ministry of Finance of the State of Schleswig-Holstein, in a decree from 2.7.2024 (reference: VI 3010 - S 2240 – 19), explicitly pointed out the potential tax traps. The tax requirements for influencers have already been summarised by us in a report in the 02/2022 issue of the PKF newsletter; we have now taken the recent decree as an opportunity to highlight three specific tax traps:
Benefits have to be taxed
When companies give influencers products that are to be promoted and the influencers are allowed to keep these, such as clothing, then these are not deemed to be tax-exempt gifts but, instead, operating income because these have to be regarded as remuneration for a business activity. The same will apply to services such as, for example, cosmetic treatments and hotel stays that influencers make use of free of charge and promote on social media; these likewise have to be taxed as operating income. Influencers should be aware that their activities on social media networks are closely monitored by the tax offices, too, and that they can also glean information from publications, such as, Instagram stories and blog posts. Those who do not declare these benefits as operating income run the of risk the risk of being accused of tax evasion.
Clothing is usually non-tax deductible
Influencers may not deduct the costs for private clothing as operating costs because only typical workwear - such as, for example, protective work clothing - would be recognised for tax purposes. The argument that new clothing is routinely needed for public appearances is not relevant in this context. However, if a company gives an influencer clothing as a present - which is frequently the case with fashion influencers - while no costs and therefore no operating expenses arise for the influencer, nevertheless, the benefit received has to be taxed as operating income.
A clear distinction has to be made for travel costs
Travel costs may only be fully claimed as operating costs if the trip was at least 90% business related. In the case of trips where there is more than one purpose, for example, a private holiday with single working days then only the business part would be tax-deductible. In this case, a clear distinction would have to be made between the private and business time components. For example, if an influencer combines a business trip with private holidays, then it would be crucial to precisely split the expenses into the business and private portions.