Management
TDS HERE’S WHAT THE NEW
RULE MEAN FOR SOCIAL MEDIA INFLUENCER The Tax Digital Service (TDS) is a new rule that will be implemented by the IRS in July 2022. It will require all social media influencers to disclose their relationships with companies that pay them to promote their products or services on their social media platforms. This is a big change for social media influencers who have been operating under the assumption that they are exempt from disclosing these relationships. What this means for you as an influencer is that you’ll need to start thinking about disclosure and monitoring your tax compliance more closely.
The purpose of the rule is to help prevent social media influencers from using their platform to promote products in a way that unfairly advantages themselves or their brands. For example, an influencer who earns money from promoting a product on social media but does not declare this income may be giving the impression that they are endorsing the product without being paid for it. By declaring their earnings, social media influencers can reassure their followers that they are receiving fair compensation for their work and avoid any potential conflicts of interest.
What is the TDS rule?
Although the TDS rule will undoubtedly impact social media influencers in a variety of ways, there is still plenty of room for creativity and innovation when it comes to marketing on social media. Influencers who are prepared to comply with the rule will be able to continue promoting products in a positive way while those who are not will face penalties.
The TDS rule is a new regulation that will come into effect on July 1st, 2022. The rule states that any social media influencer with more than 2,000 followers must declare their earnings and compensation from social media platforms. If an influencer does not comply with the rule, they may be subject to penalties including financial penalties, loss of credibility and even have their accounts closed.
www.businessconnectindia.in | Vol. 4 | Issue 12 July 2022 INDIA
36
