Influencers have established themselves as important players in digital marketing. Companies use them to communicate products and services to potential customers in a targeted manner. This raises important VAT issues for influencers as well as for their clients and cooperation partners. This article examines the key aspects from the perspective of influencers and the companies that use their services.
VAT OBLIGATIONS FOR INFLUENCERS
Influencers often receive monetary remuneration or benefits in kind in the form of products or services for their advertising activities. As soon as their taxable turnover (worldwide!) exceeds the threshold of CHF 100,000 per year, they are subject to VAT and must register with the Swiss Federal Tax Administration. This applies to remuneration for advertising services as well as the sale of own products.
One example: Influencer René from Zurich cooperates with fashion houses and hotels. He receives free overnight stays in return for advertising services on social media. According to Article 24 paragraph 3 of the VAT Act, this is considered a barter transaction: the market value of the hotel accommodation corresponds to the taxable remuneration for his advertising service. If an existing hotel bill is waived instead of a monetary payment, this is a "supply in lieu of payment" in accordance with Article 24 paragraph 5 of the VAT Act, whereby the originally agreed booking amount serves as the assessment basis.
Sponsored posts, affiliate income or subscription fees from followers must also be included in the taxable assessment basis.
VAT IMPLICATIONS FOR CLIENTS
Not only influencers themselves, but also their clients must be aware of the VAT consequences, particularly in cross-border business transactions. The place of performance for advertising services is determined in accordance with the recipient location principle. Companies that purchase services from foreign influencers should check whether the reverse charge procedure applies.
An example: A Swiss hotel commissions an influencer based in Germany to promote its resort. As the service is provided to an entrepreneur based in Switzerland, the tax liability is shifted to the Swiss hotel. The hotel must pay the VAT itself as part of the reverse charge procedure and declare it accordingly in the VAT statement.
SALE OF OWN PRODUCTS THROUGH INFLUENCERS
Influencers who sell their own products via online stores are subject to the rules for deliveries. The place of delivery is determined by the place where the goods are located at the time the power of disposal is obtained. As a rule, this is the place of residence of the influencer. If deliveries are made to foreign customers, the question arises as to whether a tax-exempt export delivery exists or whether the influencer must register for tax purposes in the recipient country. The b2c and OSS or mail order regulations in Switzerland could also be briefly discussed here.
CONCLUSION
Both influencers and the companies that work with them should carefully examine the VAT consequences of their business models. Compliance with the applicable regulations can minimize tax risks and avoid unexpected additional claims. In any case, it is advisable to seek sound tax advice.
