Based on my clients’ requests between late 2015 and early 2016, IRAS appears to be looking at Online Business Profits closely and urging the owners of such Online Businesses and Bloggers to disclose any undeclared income to IRAS.
IRAS considers cash or goods received from blogging or any other online marketing activities as taxable gains or profits from trade or business, i.e. Blogging Income. As such, such cash and goods (i.e. monetary and non-monetary) are taxable regardless of:
1. whether it is a part-time hobby or a full time job; and
2. whether there is a contract between the payer and recipient.
IRAS expects goods received by Bloggers to be valued at market price. This includes food and drinks for review and rating purposes. Perhaps the main question is whether IRAS can find out if a Blogger receives something in goods from a business or person. If the person whom you received the goods from claimed a tax deduction and this was disclosed to IRAS, it may potentially be linked to you. In simple terms, your income is an expense to him. If IRAS knows his expense, IRAS would be able to track it to your income.
Many Bloggers however feel that tax on Bloggers should be restricted to cash receipts and advertising revenue. Goods should be excluded from tax on Blogger. Is there room to argue otherwise? How can Bloggers comply with the tax rules without paying too much tax?
To mitigate the risk, A Tax Advisor Pte Ltd will be able to assist in your tax return preparation or make any necessary disclosure to IRAS. Email us now at firstname.lastname@example.org. Find out more about IRAS Tax Audit and Investigation and our other services.