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What Taxes Does a Youtuber Pay?

youtuber

Perhaps you would never have thought that your hobby of aeromodelling could become a source of income, but it has been … and you wonder what now? More and more people share their hobbies or even their own life experiences through the Internet using personal blogs or platforms such as YouTube, Instagram, etc. 

In the vast majority of cases, it is a stage in the lives of many people who eventually abandon their publications or delay them over time, so that the impact and follow-up of users declines. But in other cases, the public’s interest in what is said or shown makes the followers multiply by thousands and the visits to the channels reach millions. 

It is in these cases that companies related to the theme of the channel begin to offer compensation for inserting advertising or even for testing or using their products. If you find yourself in this situation, read on!

Registration and activities

On this specific issue, the Binding Consultation of the General Directorate of Taxes V0117-19 speaks, in which the following is stated:

“…the yields obtained by the provision of advertising services by means of the cession of spaces for advertising insertions in a YouTube channel constitute returns of economic activities…”

And therefore, considering that you receive income from economic activities, you must register in the Treasury and Social Security, since there is customary in the development of the activity. Specifically, you must register in these 2 activities if you are a Youtuber:

  1. – When receiving advertising revenue: Advertising, public relations and similar services (business activity heading 844)
  2. – When uploading videos to the network: Production of cinematographic films (including videos), (business activity heading 961.1)

What taxes affect you?

1. IRPF

The remuneration you receive from companies that insert advertising on your YouTube channel must be declared in your income tax return as income from economic activities using the direct estimation method (from your income we subtract expenses) to calculate the taxable performance. 

That is, we are interested in reducing income with all expenses that are considered deductible so that the taxation is lower. But be careful what we consider deductible expenses! For an expense to be deductible you must meet the following requirements:

  1. 1. Principle of correlation with income. It must be proven that the expenses have been incurred in the development of the activity and that they are related to obtaining the income.
  2. 2. Temporary imputation. The expenses must be included in the records books and conveniently justified.

Expenses incurred in particular fields, which are considered income for consumption, will not be deductible.

As examples of specific deductible expenses for a YouTuber we can cite:

  1. 1. All related to the design or postproduction of the videos, if it is outsourced services.
  2. 2. The acquisition of apps, video games or products that are analyzed in the videos.
  3. 3. The Internet connection fee.
  4. 4. The amortization of the following investment assets:
  • computers and equipment used for the development of the activity,
  • video cameras, microphones and other accessories you may need for the execution of the recordings.

Tax benefit

If you have started the activity for the first time, keep in mind the following tax benefit: you can apply a 20% reduction on your annual performance in the year of the activity beginning and the next one

We give you an example: if in 2019 you start the activity and get a return of € 40,000 (income minus expenses) you will only pay € 32,000, and if in 2020 your yields amount to 60,000, you will only pay € 48,000.

Since the activity of advertising services is a business activity, it is not subject to withholding (in your invoices you must not indicate any withholding) and therefore, you will have the obligation to submit quarterly payment form 130 on account, paying 20% of your accumulated net return.

2. VAT

You must invoice for advertising services, activity subject to VAT, so that in the invoices that you issue to companies that publish on your channel you must apply 21% VAT.

On the other hand, that VAT that you charge to your customers will be reduced in the amount of VAT of the acquisition of the goods and services that you need for the development of your activity, applying the following formula:

VAT charged (income invoices) – VAT supported (expense invoices) = VAT you have to pay quarterly


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