Sunwing flight influencers will have to declare the value of their airfare and hotel stay, says the Canada Revenue Agency (CRA). The profession of influencer and content creator is now under the magnifying glass of auditors who monitor in-kind payments.
It is with this example that the Canada Revenue Agency (CRA) explained to La Presse that some taxpayers may not suspect that they owe money to the tax authorities.
An ARC team is now dedicated to observing the social media economy on YouTube, Instagram, Facebook, Twitch, Twitter and TikTok. It analyzes the activities of influencers and content creators of all ages, Charles Drouin of the Canada Revenue Agency (CRA) said in a videoconference interview.
“We monitor what’s going on and when we see trends, that there are a lot of high-level transactions, a lot of money floating around in an area, we’re going to dig a little deeper,” says Charles Drouin.
Missharvey video game champion influencer Stephanie Harvey, winner of 2022 Big Brother Celebrities, calls in a professional and declares everything.
In addition to traditional compensation, the ARC mentions influencer channel subscription revenue, sales of general merchandise, and what the ARC calls “payment in kind.”
“It is when one receives goods or services instead of money. When you receive a payment in kind, you include the fair market value of that product in your income,” explains Charles Drouin.
How to determine if the proceeds were used to compensate the influencer? It’s all about intention when the influencer receives the gift, says Charles Drouin.
“If the company sends me a cap and says, ‘You have a choice to wear it or not, but I’ll send it to you and I’ll give it to you’, then the company didn’t ask me officially to promote,” he cites as an example.
“But if the company says to me, ‘I’m sending you a cap, you wear it, you promote it’, then it becomes commercial. »
At the Muze Influence agency, which notably represents Kim Rusk, Varda and Livia Martin, we make sure to obtain clear partnership contracts with the brands, explains in an interview its president Pierre-Olivier Beaudoin.
When it comes to mass mailings of products and event tickets, content creators have no control over what they receive, argues Pierre-Olivier Beaudoin.
“It’s a marketing agency strategy. These are never things that are requested in exchange or with a pre-established partnership. However, if the influencer has a pre-established collaboration with a material supplier to document renovations, then the value of the materials will be declared. »
For its part, the agency Clark Influence, which advises its clients on how to remunerate influencers during a campaign, favors cash remuneration.
“It doesn’t have to be the norm to get paid in free stuff, because you have to pay rent and credit cards,” says Nicolas Bon, president of Clark Influence.
“With the professionalization of the profession of influence, influencers accept less objects for remuneration, because their work has a cost and their audience has a cost, and some brands that offer services do not have a product to give away”, he continues, stating that the remuneration of influencers has increased significantly in recent years, with supporting studies.
In the case of influencers who flew south and stayed at hotels, many made daily videos showing the rooms, the beach and the flight, Charles Drouin said. Why did they make these videos? he asks. If it is to invite people to come to the hotel, the objective is commercial.
If the December 30, 2021 airfare and hotel package in Tulum have not been paid for, this is a gift that influencers must report on their tax return this year, unless to have already done so in last year’s. Also at the provincial level, all goods, services and gifts received in exchange for work must be declared.
The influencer becomes what is known as a self-employed worker or freelancer. Special forms must be completed, the T2125 at the federal level and the TP-80 at the provincial level.
“The influencer needs to find the fair value of the product in the market and add it to their business income along with their cash compensation. Then, he can deduct business expenses, explains accountant Mylène Goyette, owner of Goyette CPA inc. in Saint-Jean-sur-Richelieu.
Keep all possible traces, all your receipts, all your email exchanges and do not erase anything, advises the CRA.
“Because if there’s an audit, the Revenue Agency says ‘you made income’ and you say ‘no, that’s not exactly what happened’, the more documents you’ll have. , the more you will be able to explain how it happened. »
Some bills will be used as deductions for employment expenses, such as cell phone, phone and internet plan, makeup, hair styling products and parking fees.
“There are people who might wake up tomorrow and say, ‘My God, I’ve been doing this for years, do I owe the Agency any money?’ It is possible that yes and you can modify a tax return from a previous year on the internet by going to My File, ”underlines Charles Drouin.
You can request changes for the previous 10 years. The CRA, on the other hand, can check your statements for the last seven years. If you forgot to declare amounts, you will have to pay a penalty and interest.
Someone alleges accepting gifts without knowing it was a business partnership? The CRA is proposing to use the Voluntary Disclosure Program. “We will look at the circumstances and see what we can do,” said Charles Drouin.
Any self-employed person or content creator who wishes to have information on what he must declare or not can speak confidentially with a liaison officer. It is a question of making an appointment by filling out a form.