The CRA Is Watching Influencers and Their Income
The Canada Revenue Agency has been keeping a close eye on certain social media influencers and their accounts. In particular, the CRA has been closely monitoring social media influencers that profit more that $500,000 in paid sponsorships to see if their income lines up with their tax filings. Additionally, the CRA is keeping a close eye on video-game streamers with more than 1 million followers that use platforms such as YouTube, and those who earn their income through subscription fees and merchandise sales.
The CRA has mandated rules for individuals who earn money through social media platforms such as Instagram, Twitter and/or TikTok and requires that all of these influencers that fall under the specified category report all their income, even if it is non-monetary, such as free trips, gifts or sponsorships. It is also important to note that if the influencer has and is operating under a registered business, they are required to file a corporate tax return.
This news may come as no surprise to influencers as previously the Canadian government decided to ramp up governance of the influencer marketing industry. In December 2019, the Competition Bureau sent approximately 100 letters to advertisers and advertising agencies urging them to be compliant with Canadian marketing legislation and the Bureau’s practice notices relating to influencer marketing. You can read more about this on our previous blog post Proceed with Caution in 2020 as Canada Tightens Grip on Influencer Marketing.