Case Study: Mike Thurston

Mike came to us looking for a way to reduce his taxes. We talked about moving to Dubai which he was already thinking about and how that would help him to reduce the tax he paid on his income.

Given that he can run his business from anywhere and most of his income came from outside the UK, it made sense for him to relocate to a zero-income tax jurisdiction.

We helped him with the entire process from introducing him to our partners to setting up a free zone company to structuring the income flows and carrying out the necessary procedures in his UK tax filings to make sure that he is treated as a non-UK resident for UK tax purposes. Mike now enjoys tax-free income in Dubai saving him £000’s!!

To learn more about our clients and what they say about us check out our testimonials!

Tax laws abroad

Different countries have different tax laws when it comes to taxing social media influencers. I will give some examples of countries and their tax laws.

Dubai

Dubai is currently an income tax free jurisdiction – no one pays income tax on their earnings. However they have recently announced that companies will start to pay corporation tax at a rate of 9% albeit there may be some exemptions available.

That said, it is still highly advantageous compared to the UK where overall taxes can be over 50% when you take into account both corporation tax and income tax together.

Bali

While the Indonesian government does not currently have any specific tax laws in place for social media influencers, that doesn’t mean they don’t have to pay taxes at all. In terms of paying taxes in Bali, social media influencers will need to file a tax return with the Indonesian government regardless of their employment status.

This return will need to include all income earned from activities in Bali, such as sponsorships, product endorsements, and other forms of compensation. The tax rate in Indonesia is relatively low, at only 5% personal income tax for most income earned. The government have recently introduced special treatment for ‘digital nomads’ to encourage people to locate to and work out of Bali and offered favourable tax treatment as an enticement.

United States

Influencers are taxed in the US based on their location. If they live in a state with high-income taxes, they will likely have to pay more taxes than someone who lives in a state with lower taxes. This is because income from social media influencers is considered taxable income.

Canada

If you are a Canadian citizen and live in Canada, you are required to pay taxes to the Canadian government. But if you are a Canadian citizen and live in the United States, you are only required to pay taxes to the IRS.

Australia

Influencers are only to pay tax on their Australian-sourced income. This means that if an influencer has followers in other countries, they will not be taxed on that income.

Other countries include:

United Kingdom

Social media influencers are taxed based on their residency status. This means that if an influencer is a resident of the UK, they will be taxed on their worldwide income.

However, if an influencer is a non-resident, they will only be taxed on their income from sources within the UK. There are a few countries that have special rules for social media influencers.

Conclusion

As an influencer, it’s important to be aware of the tax implications of your earnings. Depending on where you live, you may be subject to different tax laws. And this can have a significant impact on your earnings as a social media influencer.If you’re fed up of paying sky high UK taxes and thinking of relocating abroad anyway and would like to see where and how best to do so to keep more of what you earn, you can book a call with a specialist at Capture accounting here.