Introduction
Since 2017, the Canada Revenue Agency (“CRA”) has maintained an online guidance document titled “Compliance in the platform economy”, which focuses on taxpayers earning income through smartphone and internet applications. In this document, CRA identifies four categories of “platform” income:
- Sharing economy: Income generated through platforms that allow users to leverage the use of their personal assets, such as Uber (vehicles) and Airbnb (real estate).
- Gig economy: Income generated through platforms that allow users to offer short term work agreements, such as Fiverr.
- Peer-to-peer (P2P): Income generated through platforms that allow the direct sale of goods between individuals, such as eBay and Etsy.
- Social media (or social influencers): Revenue earned through social media platforms from ads, subscriptions, product placement, and product promotion, such as YouTube, Instagram, and Twitch.
This article provides further details on the fourth category: social media influencers. This is particularly apt in light of comments made by CRA officials in late 2020 indicating that CRA will be increasing its enforcement efforts against influencers making over $500,000.00 a year.
Since earning money as an influencer on social media platforms is a relatively new way to earn income, the spectre of increased enforcement should raise important questions that any aspiring influencer should keep in mind.
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