With an extensive solid experience with clients working in the influence, modeling and agency professions, we offer precise support tailored to the specificities of your activity.
Houdart A&C’s expertise as an expert accountant for influencers
As a chartered accountant, Houdart A&C works with several clients in the influencer sector, and in related fields such as modeling or artist-authors. We have a thorough understanding of the challenges these professions daily face in terms of accounting, tax, social security and the choice of social and tax status.
We assist our clients in their bookkeeping, tax returns, social security declarations and the preparation of pay slips for any employees they may have.
Characteristics of the Influencer Profession
Influencers, a growth driver for businesses
Social networks have profoundly altered the marketing approach of brands, but also of all businesses and institutions, as digital existence has become essential for most economic entities. With the rise of blogs, social networks like Twitter and Instagram, interactive broadcasting channels like Youtube and Twitch, and dedicated websites, companies have created a new channel to communicate with their customers and stakeholders.
Instagrammers, youtubers, bloggers, tiktokeurs – influencers serve as amplifiers for these entities to expand their digital reputation, enhance their brand recognition, and ultimately increase their sales, as the number of companies and institutions utilizing the services of influencers has significantly grown in recent years.
Influencer’s remuneration: a professional income
The generation of income in return for the posts generated constitutes a professional remuneration, on which the expenses incurred in the production of the media content can be deducted, and must be qualified for tax purposes according to the status of the influencer: salaried or self-employed. Independent influencers must affiliate with the appropriate social organizations, which may vary depending on their situation, in order to contribute to social protection and basic and supplementary retirement pensions. This requires the implementation of accounting and tax organization with the assistance of an expert accountant who is familiar with influencers’ activities.
The social status of the influencer
An analysis of the service provided and the remuneration received is necessary to determine the social status of the influencer and the nature of the income earned.
Influencer under an employment contract
The relationship between the influencer and the contracting party is often similar to that of a model if the collaboration between the influencer and the brand involves the sole publication of a photo or video aimed at promoting a product or service to his or her community, and the service requires the physical presence of the model as a model. The post is then considered as an advertisement.
The activity of modeling is defined by Article L7123-2 of the Labor Code, and its definition aligns with the services provided by influencers in certain situations.
Any paid modeling contract is presumed to be an employment contract. Therefore, even if the relationship between the brand and the influencer is occasional, the presumption of employment applies with all the legal, social, and tax consequences that this classification entails, both for the employed influencer and the employing brand. The influencer is then subject to the general regime for employees and assimilated workers.
All or part of the remuneration received by the influencer from the contracting party can also be analyzed as the consideration for the provision of services, resulting from a contractual relationship. In this case, the financial compensation does not fall into the category of wages.
This particularly applies to the classification of amounts received from the sale or exploitation of photos, videos, and recordings, which are not assimilated to wages, provided that the physical presence of the model is no longer required to exploit the recordings and that the remuneration does not depend on the wages received for the production of the recordings. The remuneration must be based on the proceeds from the exploitation of these recordings. Such income is then considered as Non-Commercial Profits (Bénéfices Non Commerciaux – BNC).
Income from the production of content may therefore be considered as a salary, but post-production income or royalties are subject to the BNC regime from a social, tax and legal point of view.
It is necessary to be cautious as the Court of Cassation has sometimes classified income from the exploitation of a model’s image as wages, due to its flat-rate nature, without distinction between the remuneration for the shoot and the remuneration for the exploitation of the recordings.
Given the professionalization of this profession and the elements presented above, one may consider the opportunity to establish a dedicated legal structure.
The analysis of the service by an expert accountant with a good understanding of the influencer, modeling, and artist-author sectors, such as Houdart A&C, allows for a precise determination of the nature of the service provided and the resulting tax and social regimes.
The services provided by an influencer can also be analyzed as the achievements of of an artist-author, when the shots result in an original photographic creation, the number of signed prints of which is limited to 30 copies, whatever the media.
In such cases, the various income derived from the exploitation of these photographs then fall under the social and legal regime of artist-authors. This includes the transfer of exploitation rights to a third party (reproduction rights or performance rights), sale of original works (signed prints, limited to thirty copies, regardless of format or medium), artwork rental, and copyright royalties related to the exploitation of the works (reproduction or distribution), among others.
Tax regimes applicable to influencer activity
If all or part of the relationship between the contracting party and the influencer is classified as an employment contract under the French Labor Code, similar to a modeling service, the income of the employed influencer will logically be considered as wages and therefore taxed as salaries and wages. The influencer will have taxes withheld at source, and the applicable tax rate will be determined according to their income. Employee social security contributions will also apply.
Influencer under BNC regime
If the gross income of the influencer does not exceed the micro-enterprise threshold, which is €72,600, their income will be subject to the micro-BNC regime. They are not required to keep accounting records or file a tax return form (liasse fiscale). Their income, without deducting any expenses, is directly reported in the appropriate box of their income tax return. The influencer will be granted a 34% deduction on their turnover for operating expenses and will be taxed on the remaining 67% according to the progressive income tax scale. It should be noted that this deduction is only applicable for tax purposes and does not apply to social security contributions. The contributions will be determined on a flat-rate basis at approximately 22% of their turnover.
If the influencer’s non-commercial income (revenue, not profits) exceeds €72,600 (excluding taxes), they must keep accounting records and file an annual tax return form (cerfa 2035). If the income is below this threshold, the influencer has the option, like any individual business under BNC, to to opt for the actual income tax declaration regime.
This option is particularly advantageous when:
- The actual professional expenses incurred by the influencer to generate their income exceed the 34% flat deduction provided by the micro regime.
- The influencer has incurred a loss which can only be attributed to other activity income if he opts for the actual income tax declaration regime.
In the case of declared income (déclaration contrôlée), the taxpayer is taxed on the actual profits earned. This requires keeping BNC accounting records by an accountant experienced in this type of activity, such as Houdart A&C.
Influencers need to be vigilant about how they declare their income and where it is taxed, when they receive income from different countries, or when they themselves run their business from a foreign country. Since January 1, 2020, the tax authorities have the ability to collect personal data freely accessible on the internet, particularly on social networks, to assess the level of income likely to be taxed in France, and the coherence of the income reported.
Influencers who create and sell original photographic works and who are covered by the social regime of artist-authors are also self-employed and convered by the non-commercial profit tax regime. In terms of social security, their income is subject to contributions to the URSSAF for artist-authors.
If the influencer has established a company subject to corporate income tax (IS), the fiscally opaque company will be taxed on its own profits. The non-employed influencer’s remuneration, which is deductible from the company’s profits, will be declared and taxed under the category of salaries and wages in the influencer’s personal income tax return.
The applicable VAT rates for the productions of independent influencers or influencers operating as a company
VAT exemption thresholds
The VAT exemption thresholds differ from the micro-enterprise thresholds. Therefore, it is possible to be required to declare VAT without having to establish annual accounts
For the provision of services, the VAT exemption threshold (article 293B of the CGI) applies if sales are below €34,400. If this threshold is exceeded, there is a tolerance that allows maintaining the VAT exemption regime during the year of exceedance, as long as the turnover does not exceed €36,500. Above €36,500, VAT must be applied from the first day of the month in which the threshold is exceeded.
For artist-authors, the VAT exemption threshold (article 293B of the CGI) is applicable if sales are below €44,500. In case of exceedance, there is a tolerance that allows maintaining the VAT exemption regime during the year of exceedance, as long as the turnover does not exceed €54,700. Beyond €54,700, VAT must be applied from the first day of the month in which the threshold is exceeded. Above €54,700, VAT must be applied from the first day of the month in which the threshold is exceeded.
Even if you are exempt from VAT, you can opt to be subject to VAT.
VAT rates applicable to influencer productions
The applicable VAT rate for influencers subject to VAT, i.e., not eligible for VAT exemption, is generally the standard rate. The standard VAT rate in France is set at 20% (Article 278 of the French General Tax Code). It applies to all products or services for which no other rate is expressly provided.
Provisions regarding services that can be considered as located abroad or provisions regarding services between taxable persons within the European Union may also apply, in such case the service is invoiced without VAT or under the recipient’s reverse charge regime.
VAT rate applicable to rights exploitation
The VAT rate for the transfer of copyright is 10%. These transfers of rights, including representation rights, reproduction rights, adaptation rights, and remuneration for private copying, are part of the exploitation of the author’s rights in exchange for received amounts.
VAT rate applicable to artworks
If the photographic creation is subject to an original signed transfer limited to 30 copies, it may be considered an artwork and be subject to a reduced rate of 5.5%.
Common questions about influencers’ tax and social security regimes
How should an influencer declare their income from their activity ?
The presumption of employment applies to the income of independent influencers inherent in the production of content, similar to the modeling activity. Post-production income or royalties are subject to the BNC regime from a social, tax and legal point of view, provided that the physical presence of the influencer is no longer required and the remuneration for the exploitation of rights is separate from the salary received for their production of content and not a flat-rate payment.
In what situation does an influencer need to keep accounting records?
If an influencer earns income that is not classified as salaries and wages, but rather income from the exploitation of rights related to their media productions, their income falls under the BNC regime. If the generated income exceeds the micro-enterprise threshold, they are subject to the controlled declaration regime and must produce accounting records and file a tax return form (cerfa 2035).
What is the VAT rate and regime applicable to influencer services?
In general, the standard VAT rate of 20% applies to the services sold by an influencer. However, income derived from the exploitation of copyright may be eligible for the intermediate rate of 10%.
Why choose a chartered accountant who masters the specificities of influencers ?
Like any entrepreneur, an influencer needs the advice and support of a chartered accountant who has sufficient expertise in the tax and social security issues related to their profession. Beyond managing accounting, taxation, and the preparation of annual accounts, an experienced accountant can help influencers make appropriate management choices that align with their chosen status and the scale of their activity.