Being an influencer is no longer just a hobby where someone occasionally receives a free product. Particularly within the fashion industry, influencer marketing has evolved into a serious business involving long-term partnerships, commercial collaborations, and substantial income streams. In practice, however, many influencers remain uncertain about the tax implications of their activities. How does VAT work? Which expenses are tax deductible? And do gifted products or clothing need to be declared as income? In this article, we explain how taxation works for influencers and what fashion influencers in particular should keep in mind.
Many influencers start small. A few collaborations through Instagram or TikTok may initially seem like side income, but once income is generated on a structural basis, the Dutch tax authorities will often regard the activities as running a business. Whether someone qualifies as self-employed for income tax purposes depends on several factors, including:
- the scale of the activities;
- the number of clients;
- the degree of independence;
- entrepreneurial risk;
- the intention to make a profit.
For influencers in the fashion industry, entrepreneurship is often assumed once paid collaborations with brands, webshops, or agencies become recurring.
This usually also means that the influencer becomes liable for VAT.
An influencer effectively provides a marketing service. Examples include:
- sponsored posts;
- affiliate marketing;
- video content creation;
- attending events;
- promotional campaigns for fashion brands.
In principle, these services are subject to 21% Dutch VAT. A common mistake is that influencers forget to charge VAT because they mainly operate through social media platforms. However, from a tax perspective, the platform itself is irrelevant: as soon as a commercial service is being provided, VAT generally applies.
Influencers in the fashion industry regularly work with international brands. In those situations, different VAT rules may apply.
For example, if you work for a German or French fashion brand with a valid VAT number, the VAT is often reverse charged to the foreign business. In that case, the invoice should state “VAT reverse charged”.
Different rules may apply again when working with clients outside the European Union. Because influencers often operate internationally, maintaining a correct VAT administration is essential.
Of course, we are happy to assist with this.
One of the most common questions influencers ask is whether gifted clothing or beauty products must be declared as income. In most cases, the answer is yes.
When an influencer receives products in exchange for promotion, the Dutch tax authorities generally regard this as payment in kind. The value of the received products is therefore included as turnover.
For example, if you receive a designer coat worth €1,500 in exchange for an Instagram campaign, that value may be regarded as taxable income. In principle, both VAT and income tax may apply. This can feel unusual because no money is actually transferred to your bank account. Nevertheless, the product still represents economic value.
The same principle applies to:
- complimentary hotel stays;
- invitations to fashion events;
- gifted jewellery;
- make-up packages;
- complimentary beauty treatments.
Particularly within the fashion industry, this regularly creates grey areas.
Naturally, business expenses may be deducted from taxable income. However, for influencers the distinction between private and business expenses is often difficult.
Ordinary clothing is generally not tax deductible. The tax authorities consider regular clothing to be a private expense, even if it is primarily used for content creation.
Only clothing that is almost exclusively suitable for business use may qualify for deduction. Examples include:
- branded company clothing;
- outfits for specific shoots that would rarely be worn privately;
- styling costs for a campaign.
A designer handbag or everyday fashion purchases are usually not deductible, even if they frequently appear on Instagram. There is, however, some nuance. Suppose an influencer purchases additional outfits specifically for a commercial campaign or Fashion Week content that they would not normally buy privately. In certain circumstances, this may lead to discussions about the business nature of the expense.
In practice, the dividing line is often whether the additional expense was incurred purely because of the business activities. In these situations, obtaining proper advice is extremely important.
Beauty and personal care products also fall into a grey area.
General expenses for:
- make-up
- skincare
- hairdressers
- nails
cosmetic treatments;
are usually regarded as private expenses.
However, for full-time fashion or beauty influencers, the business element may be stronger than for regular entrepreneurs, especially where appearance is directly linked to the commercial success of the online platform.
Even so, the tax authorities remain cautious. Simply because an influencer “needs to look presentable” does not automatically make such expenses tax deductible.
The more specifically an expense can be linked to a concrete campaign or production, the stronger the business argument becomes.
Tickets for fashion shows, influencer events, and networking gatherings can often qualify as business expenses, provided there is a clear commercial purpose.
Examples include:
- networking with brands;
- content creation;
- relationship management;
- acquiring new clients.
Travel expenses for events or photoshoots are also generally deductible.
Luxury trips, however, are viewed critically by the tax authorities. If a business press trip is combined with a private holiday, the private portion must be separated.
The profit generated by an influencer is generally subject to income tax. Taxable profit usually consists of:
- income from collaborations;
- affiliate income;
- advertising revenue;
- gifted products with economic value;
minus deductible business expenses.
If someone meets the Dutch hours criterion of 1,225 hours per year, certain entrepreneurial tax benefits may apply, such as:
- self-employed deduction;
- start-up deduction;
- SME profit exemption.
Particularly for rapidly growing influencers, it is important to gain timely insight into their tax position. Many influencers start operating without a proper administration, while income generated through social media is increasingly scrutinised by the tax authorities.
Within influencer marketing, cash flows, barter deals, and international collaborations often overlap. As a result, bookkeeping can quickly become disorganised.
A proper administration should therefore include:
- invoices;
- contracts with brands;
- screenshots of barter deals;
- valuations of received products;
- business receipts;
- VAT records.
Barter deals in particular are often overlooked, despite potentially having significant tax implications.
Influencers in the fashion industry are increasingly confronted with complex tax matters. Not only paid collaborations are taxable, but gifted products or invitations may also form part of taxable turnover. In addition, the distinction between business and private expenses is often sensitive. Clothing, beauty products, and events are not automatically deductible, even if they prominently feature on social media. For that reason, it is important to maintain a proper administration from the very beginning and carefully assess the tax consequences of collaborations in advance. This helps avoid unpleasant surprises later on while ensuring that available tax opportunities are utiliseer effectively.
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