According to the information published on the website of the National Tax Administration Agency (ANAF), people who earn income from posts on Facebook, Instagram or other such social networks are required by law to declare that income and pay income tax, taxes and contributions to the state.
Specifically, individuals who earn income from posts made on various social networks such as Facebook, Instagram, YouTube, TikTok, LinkedIn, Twitter, Snapchat or Pinterest, whether it is income in cash, which involves financial remuneration, or income in kind, such as products, services or travel received, are legally obliged to calculate the income earned and pay income tax, taxes and contributions established by law.
Therefore, from a tax point of view, there can be two situations:
- the activity is carried out on a continuous basis, in which case the taxpayer is considered to be earning income from self-employed activities,
- the activity takes place on an occasional basis, in which case the income is considered as income from other sources.
Therefore, according to the ANAF guide, if the activity is carried out regularly, continuously, on one’s own account and with the aim of obtaining income and if the criteria of an independent activity are cumulatively met, the provisions of the Tax Code on income from independent activities are applicable to the income obtained by individuals from posts made on various social networks, which, in this way, advertise for various companies or brands.
Income from self-employment:
We mention that this type of income is considered income from self-employment activities provided that the exercise of the activity fulfils, according to the Tax Code, at least four of the following criteria:
- the natural person has the freedom to choose the place and manner of carrying out that activity, as well as the working hours;
- the natural person is free to carry out the same activity for several clients;
- the risks inherent in the activity are assumed by the natural person carrying out the activity;
- the activity in question is carried out using the natural person’s own assets;
- the activity is carried out by the natural person using his/her own intellectual capacity and/or physical performance, depending on the specific nature of the activity;
- the natural person is a member of a professional authority or order with the role of representation, regulation and supervision of the profession, according to the special normative acts regulating the organization and exercise of the profession;
- the natural person has the freedom to carry out his activity directly, with employed staff or through collaboration with third parties, in accordance with the law.
Moreover, for the purposes of authorization and tax registration, these individuals who obtain income from posts made on various social networks must have, in accordance with the provisions of OUG no.44/2008, a PFA, a II or an IF as long as they carry out that activity, production, trade or provision of services, independently and continuously.
An important aspect emphasized by ANAF is that as long as the activity is carried out in Romania, the income from that independent activity is considered to be obtained in Romania, regardless of whether it is received from Romania or abroad.
We mention that, regardless of the form of organization chosen (PFA, II or IF), one can choose between determining the annual net income on the basis of the real system or on the basis of income rules.
Persons who choose to determine their net annual income on the basis of the income norms are obliged to determine the annual tax due by applying the rate of 10% to the adjusted annual income norm, the tax thus being the final one.
On the other hand, in the case of determining income under the real system, based on accounting data, the tax is determined by the taxpayer by applying the rate of 10% to the estimated annual net income considered as taxable income.
Please note that in both cases, the tax is payable on or before 25 May of the year following the year in which the income was earned.
The declaration of income from posts made on various social networks is done through the single declaration (form 212).
As mentioned above, it is submitted annually, until 25 May of each year, and at any time during the year, within 30 days from the date of the event, if a taxpayer starts an activity during the year.
In addition, persons applying the actual system will determine their tax by applying a rate of 10% to their annual net taxable income, from which the purchase cost of the electronic tax registers will be deducted, up to the amount of tax due.
The 25% social insurance contribution and the 10% health insurance contribution are due if it is estimated, for the current year, income from self-employment and income from intellectual property rights, from one or more sources or categories of income, whose cumulative value exceeds 12 gross minimum wages per country.
In terms of VAT obligations, taxpayers who earn income from postings on various social networks are required to register for VAT when they exceed the exemption threshold of 300,000 lei provided for in the Tax Code, but also when they make intra-Community purchases or provide or receive services to or from taxable persons in the EU.
Of course, these taxpayers can also register for VAT by option.
Income from other sources:
If the activity carried out is not of a continuous nature, those who occasionally advertise for various companies or brands are considered to obtain income from other sources under the Tax Code.
In the case of such income, tax is calculated by withholding tax at the time the income is received by the income payer. Therefore, a rate of 10% is applied to the gross income, which represents the final tax and is paid to the state budget by the 25th of the month following the month in which it was withheld.
Those who estimate, for the current year, income from self-employment, income from intellectual property rights, income from association with a legal person, income from the transfer of the use of goods, income from agricultural, forestry and fish farming activities, income from investments and income from other sources whose cumulative value is at least equal to 12 gross minimum wages per country, also owe the health insurance contribution.
Please note that if the contracts under which individuals obtain income from their own postings on social networks and thus advertise for various companies or brands are concluded between two legal entities, i.e. between the company that is advertised or that owns the brand or the agency that requests or mediates the provision of the service and the company of the public entity that promotes the products through social networks, the income of the individual concerned will be taxed according to the nature of the income received from the legal entity (e.g. income from dividends, from salaries, etc.).
For income from other sources obtained from abroad, individuals are required to complete the Single Declaration on income tax and social contributions due by individuals – Chapter I. Data on income earned up to and including 25 May of the year following the year in which the income was earned, as well as to calculate and pay the tax due within the same deadline, taking into account the method of avoiding double taxation provided for in the double taxation convention.
Legal basis:
- Tax Code (approved by Law no.227/2015, published in the Official Gazette no.688 of 10.09.2015), with subsequent amendments and additions;
- Methodological Norms for the application of the Tax Code (approved by HG no.1/2016);
- anaf.ro