The influencer profession is relatively new and dynamic, and the accounting of income and expenses, related to this activity, requires a specific approach. Influencers often generate income from a variety of sources, and therefore, it is necessary to know the basic accounting principles, which should be applied. Important aspects are described below, related to the accounting of the influencer's activity.

Key aspects of influencer accounting

1. Income: Influencers generate revenue from a variety of sources, which must be documented and accounted for. The main sources of income include:

• Sponsorship: Revenue from brands, who pay to promote their products or services.
• Affiliate programs (Affiliate marketing): Sales revenue, generated through unique links, provided by companies.
• Selling own products: Revenues from the sale of own goods or services, such as courses, books or merchandise.
• Advertising: Revenue from paid advertising on social media, YouTube and other platforms.
• Donations and support from followers: Revenue from platforms, which allow fans to donate funds, for example Patreon.

2. Taxation

• Income tax: Influencers pay income tax, with the percentage and method of calculation varying depending on the legal form of the business.
• Value added tax (VAT): If the influencer's earnings exceed a certain threshold (for example, in Bulgaria this threshold is 100,000 BGN), they must register for VAT. They are subject to VAT registration even before reaching the threshold for mandatory registration, if they work with international companies.

3. Activity costs

Influencers can deduct expenses, related to their activity:

• Equipment costs (camera, laptop, lighting)
• Marketing expenses (content creation, profile promotion)
• Travel and accommodation expenses, work related
• Software and Application and Platform Subscriptions

All these expenses must be documented with invoices, so that they can be reported correctly in the accounting.

4. Financial planning and budgeting

Influencers often face irregular and variable income. Therefore, it is important to do good financial planning, by drawing up budgets and predicting tax and insurance costs.

5. Insurances

Self-employed influencers must pay social security contributions, which include health and social security. It is important that these duties are carried out regularly, to avoid problems with the tax authorities.

6. Contracts and accounting documents

• Negotiate: It is good practice to enter into contracts with companies and brands to clearly define the terms of the partnerships.
• Invoices: Influencers must issue invoices for each payment, which they receive. This is especially true when working with international partners.

8. International income reporting

When receiving revenue from foreign companies or platforms, influencers should be aware of double taxation regulations and international tax treaties, if they report their activity as natural persons,or so-called "Freelancers", or "Freelancers". This is important, to avoid double taxation of income.

10. Compliance with advertising regulations

Many countries have transparency laws for social media advertising, which means, that influencers should note clearly, when their posts are sponsored or contain a paid partnership. This also affects their accounting, as there may be penalties for non-compliance.

9. Consultation with a professional

Given the complexity of tax and accounting aspects, it is highly recommended that influencers work with accountants or tax advisors, who have experience in digital business and influencer marketing.

With proper accounting, influencers can optimize their taxes and avoid problems with the tax authorities, while focusing their attention on content creation and brand building.

For a detailed consultation, contact the team at Marilena-Consult EOOD.