For many Irish businesses, working with social media influencers has become a powerful way to reach customers, build brand awareness, and drive sales. From product reviews to brand ambassadorships, these collaborations can be highly effective.
However, when influencers are paid in cash, products, or services, there are significant tax and VAT considerations. If your business provides any benefit to an influencer, it’s essential to understand the correct treatment under Irish tax law.
At Kinore, we help SMEs navigate these rules with confidence, ensuring compliance while maximising the commercial benefits of your marketing partnerships. This guide sets out what you need to know.
How to Stay Compliant When Paying Influencers
The starting point is simple: if your business gives an influencer something of value in return for promotion, whether money, goods, or services, you are making a supply for VAT purposes. VAT rules apply just as they do for any other commercial arrangement.
If you receive promotional services from an influencer, their supply to you is also subject to VAT under the usual rules. Influencers do not receive any special exemptions for their business arrangements.
Revenue’s Guidance on VAT Treatment of Social Media Influencers
Revenue summarises its position in four main points:
All income is taxable
Whether the influencer receives a cash payment or a free product in exchange for promotion, it counts as income. They can still claim allowable expenses under standard rules.
No special VAT treatment
Influencer transactions follow the same VAT rules as other income. No exemption or reduced rate applies to this sector.
Non-monetary payments are valued at market price
If an influencer receives something instead of cash, such as the use of a car as a brand ambassador, you must use its fair market value to calculate taxable income.
Even unsolicited gifts can be taxable
Free PR packs, gifted products, or other ‘surprise’ deliveries from brands can count as taxable income if they form part of the influencer’s trade or business.
Cash Payments and VAT
When you pay an influencer in cash for promotional services, treat it like any other business-to-business transaction. A VAT-registered influencer will charge VAT, and you can reclaim it if eligible.
Key considerations:
- Check the influencer’s VAT registration status.
- Ensure proper invoicing so you can reclaim VAT.
- Record all payments accurately in your books.
Non-Cash Payments: Valuing Goods and Services
Many influencer arrangements involve non-cash payments, such as free products, store credit, or the use of high-value items like cars or equipment.
In these cases:
- Assess the goods or services at their fair market value.
- Calculate VAT on that value as if you had sold the item to the influencer.
- Recognise that the influencer provides you with promotional services in return, which may also attract VAT.
The VAT Treatment of Unsolicited Gifts
When you send a PR package to an influencer without prior agreement, you may still create VAT obligations.
If the goods exceed the small gift exemption (€3,000 per year) and relate to your business promotion, treat them as a taxable supply for VAT purposes. Even without an explicit agreement, if the influencer promotes your product as part of their trade, the transaction may still fall under VAT rules.
Why This Matters for Your Business
The compliance burden doesn’t fall solely on the influencer, it also rests on your business when you provide payment, products, or services. Whether you run seasonal brand ambassador campaigns, send PR packs, or offer high-value perks for promotion, these activities can carry VAT and tax implications.
As a business owner, you should:
- Assign a fair market value to non-cash payments and document them clearly in contracts.
- Keep detailed records of all payments, both cash and non-cash, along with valuations.
- Account for VAT even when no money changes hands.
- Review your gifting and PR strategy to avoid unintended tax exposure or compliance problems.
By treating influencer partnerships like any other commercial agreement, you protect your business from costly mistakes and keep marketing activities compliant.
Applying the Rules: Real-World Examples
Example 1: Brand Ambassador Agreement
You provide an influencer with a high-end electric vehicle for six months in exchange for regular promotion on their social media. Revenue guidance requires you to treat the car’s fair market value (say €1,200 per month) as taxable income for the influencer and possibly a VAT-triggering supply for your business.
Example 2: Event Sponsorship
You invite an influencer to your corporate event, cover their travel and accommodation, and give them a high-value welcome package. The total package value counts as taxable income for the influencer and must be documented.
Example 3: PR Gifts
You send free products to multiple influencers without prior arrangement, hoping they’ll share them online. Even if unsolicited, Revenue may treat them as taxable income if the influencer uses their platform for business purposes.
Record-Keeping and Compliance
The safest way to avoid VAT and tax errors with influencers is to document everything.
At Kinore, we recommend:
- Using written agreements for all influencer partnerships, including non-cash arrangements.
- Accurately valuing all goods and services provided.
- Issuing proper VAT invoices on both sides.
- Regularly reviewing marketing and promotional spend to identify potential VAT exposures.
At Kinore, we help SMEs keep VAT compliance straightforward, accurate, and commercially beneficial. Whether you work with influencers, run sponsorships, or manage complex supply chains, we ensure you meet your obligations while protecting your bottom line.
We can:
- Review your VAT position across your business for compliance and efficiency.
- Advise on non-cash arrangements, barter deals, and cross-border supplies.
- Help you value goods and services accurately for VAT purposes.
- Streamline documentation and record-keeping to prepare you for audits and reporting.
- Identify opportunities to recover VAT and reduce exposure to penalties or interest.
Take Control of Your VAT Position
VAT can be one of the most complex and costly areas of business taxation, but with the right advice, it can also become an opportunity. When you understand the rules, keep accurate records, and structure arrangements correctly, you avoid unnecessary risks and keep your business running smoothly.
Book a Discovery Call with our Client Services Team today, and let Kinore give you the clarity and confidence to manage VAT effectively.
