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Artists and celebs will be taxed on income from online promotional activities, under new plans drawn up by the Australian treasury
By IQ on 17 Dec 2018
Musicians, celebrities and other ‘influencers’ in Australia are to be forced to pay tax on income made through sponsorships and endorsements, as the government moves to introduce an ‘Instagram tax’ on young people making money through their fame and image.
According to the Australian Financial Review, changes to tax rules, set for introduction on 1 July 2019, will see celebrities, sportspeople, internet personalities and entertainers pay the Australian Taxation Office (ATO) for all income made through advertising, sponsorships, free products, public appearances and promotions, especially when they can take advantage of tax savings by licensing their image or fame through a business separate entity.
“There is evidence that, currently, individuals are splitting, or apportioning, lump sum payments to shift more income outside of their personal assessable income,” according to a paper prepared by the Australian treasury. “Income-splitting arrangements can be central to contract negotiations with high-profile individuals.”
The Industry Observer suggests the new rules will hit young Australian musicians, many of whom are making money through advertising and sponsorships on social platforms such as Instagram.
In the US, the Federal Trade Commission is cracking down on influencers who fail to make clear which social posts are promotional – most notoriously the Instagram models and others who were paid to plug the ill-fated Fyre Festival.
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