Malaysia’s tax authority has clarified how influencer income is treated, after online claims suggested creators may not need to declare certain earnings
The clarification follows the release of new guidelines by Lembaga Hasil Dalam Negeri Malaysia (LHDN) on 14 January, outlining how income earned through social media and digital platforms is assessed for tax purposes.
LHDN says influencer income is still taxable, including non-cash benefits
According to the guidelines, income earned through influencer activities is taxable if it is received in exchange for promotional work or online influence.
This includes not only cash payments but also non-cash benefits that carry monetary value, such as free products, discount vouchers, services, or digital tokens.
Early assumptions about “free items” being exempt are incorrect
The document clarifies that free items received as part of a collaboration are not automatically exempt from tax.
If the item or service is provided in return for exposure, promotion, or content creation, and its value can be reasonably determined, it may be considered taxable income.
This applies regardless of whether the influencer receives direct cash payment.
The guidelines apply to full-time and part-time creators
LHDN’s clarification applies to anyone earning income through social media platforms, including:
- Full-time influencers
- Part-time content creators
- Individuals earning occasional income from brand collaborations
- Malaysians receiving influencer-related income from overseas sources
Influencers are advised to keep proper records and documentation
LHDN advises individuals earning through social media to maintain clear records of:
- Payments received
- Items or services provided as part of collaborations
- Contracts, agreements, and correspondence with brands
- Receipts and expenses
These records support accurate income reporting and are required in the event of verification or audit.
Influencers can also claim certain work-related expenses
The guidelines also outline expenses that influencers may deduct under Section 33 of the Income Tax Act 1967, provided the costs are incurred wholly and exclusively in the production of income.
Allowable deductions may include work-related expenses such as internet subscriptions, filming or recording equipment usage, and content editing costs.
However, LHDN clarified that personal expenses and capital purchases remain non-deductible, even if the items are occasionally used for content creation.
To remain compliant, influencers must submit estimated income under the CP500 scheme, pay advance tax instalments where applicable, and maintain complete records of income and expenses.
LHDN requires records to be kept for at least seven years for audit and verification purposes.
This guidance was issued under Section 134A of the Income Tax Act, which allows the Director-General of Inland Revenue to amend or withdraw the guidelines as necessary.