Taxation of services rendered by an influencer

Recently, Royal Decree 444/2024 of April 30 has been approved, which regulates the requirements for the purpose of being considered as a user of special relevance of video sharing services through a platform.

At this point, it is worth remembering which is the administrative criterion on its taxation in terms of VAT and Personal Income Tax that were analyzed in the consultation V3103-23 where the influencer creates content in video format and broadcasts it through a platform that belongs to a company based in the United States.

Under this premise the influencer clarifies that, for each video viewed:

1. The platform pays a portion of the amount paid by the end consumer for watching the video.
2. The remainder of the amount paid by the consumer is retained by the platform itself.

Is it an electronic service for VAT purposes?

In relation to VAT, this has already been the subject of analysis in several previous consultations, starting from the condition of the influencer as a businessman or professional.

From there, the consultation addresses a question of great importance as to whether or not these services (in this case, consisting of providing audiovisual content in electronic format for viewing through an Internet platform) have the consideration of services provided electronically for VAT purposes.

This consideration is conflicting due to what is mentioned in Article 7 of the Implementing Regulation (EU) number 282/2011, which considers that electronically supplied services include those, which provided through the Internet or an electronic network, by their nature, “are basically automated and require minimal human intervention and are not feasible without information technology”.

Thus, given the involvement of the influencer himself in the elaboration of the contents, and above all, taking into account the bidirectional nature of the communication with his followers, doubts could be raised about the compliance with this requirement of minimum human intervention.

However, the consultation does qualify the services as electronically supplied services, which may condition the applicable VAT rate or the rules of localization of these services.

Does the digital platform act on your own behalf?

The Directorate General of Taxes starts from the presumption that the digital platform in the case under analysis would act on its own behalf since the influencer does not know the necessary information regarding the purchasers of such services (the users who are followers of its content) that would allow it to locate the transaction for VAT purposes.

This being so, we must divide the provision of content supply services as follows:

1. A first provision of services from the influencer to the platform that will be localized according to the condition and location of the platform, in this case, the United States, i.e., the service will be located at the destination and will be a transaction not subject to VAT in Spain.
2. A second provision of these same platform services to end users. In this case, it will be the platform that must have information on the different followers that view the content.

And what about personal income tax?

Well, after reaching the conclusion that the payer of the income, in this case, is a platform resident in the United States that does not operate in Spain with a permanent establishment nor performs an economic activity in Spain, we find ourselves before an entity that is not among those obliged to withhold tax.

In summary, the influencer who issues his invoice to the platform located, in this case, in the United States, will issue his invoice without Spanish VAT as it is a non-taxable transaction and without Personal Income Tax as this platform is not obliged to withhold.

The consultation does not analyze what would happen if the payer were a subject obliged to withhold, which has been the subject of several consultations by the Directorate General of Taxes, reaching the conclusion in some of them that the services provided by an influencer are business services and therefore not subject to withholding (V3078-17) and qualifying them on other occasions as professional services and therefore subject to withholding (V1417-20).

For the clarification of the withholding issue we will have to wait for the General Directorate of Taxes to unify its criteria regarding the determination of whether an influencer acts as a businessman or as a professional.

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