Tax officials in Berlin are investigating influencers
In a growing challenge for German tax authorities, the issue of undeclared income by influencers is under increased scrutiny. Authorities are employing measures such as cross-checking bank accounts, public social media data, and sponsorship records to detect discrepancies between actual earnings and declared income.
This heightened vigilance is in response to the rapid rise of social media monetization, which often involves sponsorships and payments that can go undeclared or underreported. For instance, in Italy, a young influencer was found with undeclared earnings around €300,000 over three years.
The European Commission classifies influencers as traders, imposing consumer protection laws that require greater transparency on income and sponsorships. Several EU countries, including Germany’s neighbors France, Italy, and Poland, have introduced or are tightening regulations and enforcement against undeclared earnings with fines and audits.
Platforms like TikTok require influencers to adhere to monetization rules, but the fragmented nature of regulations and the blurred lines between personal and business activities create challenges in compliance and enforcement.
In response, German tax authorities have stepped up efforts to identify undeclared influencer income through audits, data matching, and legal reforms aiming to close loopholes. Influencers caught can regularize their tax status by paying dues plus fines to avoid criminal charges.
Recent developments in this area include the revelation of alleged tax fraud by influencers in North Rhine-Westphalia, estimated to have defrauded the tax office of around 300 million euros. The Berlin tax office for investigation and criminal offenses has approximately 4,000 data sets on social media figures, which have been shared with Berlin's finance authorities after processing.
Local tax investigators in North Rhine-Westphalia are analysing a package of several social media platforms containing 6,000 data sets. Berlin is coordinating with other federal states' tax authorities in this investigation. The origin of Berlin's data sets is unknown, but the Senate Finance Administration suspects they may be from the same data packages as in NRW.
SPD politician Sebastian Schluesselburg has criticized the Berlin Senate for its handling of potential tax evasion by influencers. He finds the response from the Senate Finance Administration insufficient and plans to follow up on this issue. Schluesselburg believes that tax evasion by influencers is not a minor offense and harms everyone.
The "Berliner Morgenpost" was the first to report on this issue. It's important to note that simply being included in these data sets does not automatically imply tax evasion. However, there is a potential risk of incorrectly declared earnings from social media platforms leading to back payments and fines.
As investigations continue, it's clear that the issue of undeclared income by influencers is a significant concern for German tax authorities, prompting enhanced regulatory scrutiny and enforcement measures. The European regulatory environment also pushes for more transparency and accountability among social media creators across the region.
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- The issue of undeclared income by influencers is not limited to Germany; it's a growing problem across Europe that requires increased scrutiny from finance, politics, and general-news sectors.
- Businesses in the finance industry, particularly bank authorities, are employing new measures to detect discrepancies between actual earnings and declared income of influencers, in light of the rise in social media monetization.
- As more countries introduce stricter regulations against undeclared earnings in the influencer industry, there's a general push for greater transparency and accountability among influencers, in line with consumer protection laws.
