Influencer marketing has become an important marketing tool. It is therefore not surprising that it is increasingly becoming the focus of financial management. Major events such as the European Football Championships or the Olympics offer influencers the opportunity to secure high-revenue advertising deals with companies. The legal and tax framework conditions should be precisely defined for the company and influencer.
Transition from the small business regulation to regular VAT liability
Influencers need to keep an eye on VAT in particular. Anyone who has previously operated as a small business in accordance with Section 19 of the German Value Added Tax Act (UStG) should check whether the higher income means that the turnover thresholds of the small business regulation are exceeded. This is the case if the turnover, plus the tax due on it, did not exceed the value of EUR 22,000 in the previous calendar year and is not expected to exceed the value of EUR 50,000 in the current calendar year. You then become a regular entrepreneur within the meaning of VAT law. This means that the services provided by influencers in Germany are subject to German VAT. If you do not want to deal with issuing invoices for the advertising services provided, you can agree the so-called VAT credit note procedure with the contractual partner as a billing method in accordance with Section 14 (2) sentence 2 ff of the German VAT Act. In this case, the invoice is issued by the recipient of the service (here: the company to which the advertising service is provided) instead of the service provider (here: the influencer). But beware: influencers are responsible for the accuracy of the information provided. The invoice should therefore always be checked.
Anastasia Podolak
Senior Manager, Tax
KPMG AG Wirtschaftsprüfungsgesellschaft
Input tax deduction and advance VAT returns for influencers
It should also be noted that in addition to the VAT return, monthly or quarterly advance VAT returns must also be submitted. The positive aspect of this is that the input tax for goods and services purchased is refunded by the tax office in accordance with Section 15 of the German VAT Act. The prerequisite for the refund is that these are intended for business activities, that you are in possession of a proper invoice and that you do not carry out any so-called input tax-damaging transactions - for example, transactions in accordance with section 4 number 8 ff UStG.
