Tax Treatment on Income of Social Media Influencers (Malaysia – 2026)

Official Source:
Inland Revenue Board of Malaysia (LHDN)
📄 Guidelines on Tax Treatment on Income of Social Media Influencer

Who Is Considered a “Social Media Influencer” by LHDN?

According to LHDN, a social media influencer is an individual who earns income through digital platforms by:

  • Promoting products or services

  • Creating sponsored or paid content

  • Endorsing brands

  • Receiving benefits in cash or in kind due to online influence

Platforms include (but are not limited to):

  • Instagram

  • TikTok

  • YouTube

  • Facebook

  • X (Twitter)

  • Blogs & live-streaming platforms

👉 Key point: Follower count is not the deciding factor.
If you earn income from online influence activities, you are taxable.

Types of Taxable Income (What LHDN Looks At)

LHDN clearly states that both cash and non-cash benefits are taxable.

1. Cash Income (Fully Taxable)

Includes:

  • Sponsored posts

  • Brand collaborations

  • Affiliate commissions

  • Advertising revenue (e.g. YouTube AdSense)

  • Appearance fees

  • Paid reviews or live sessions

2. Non-Cash Benefits (Also Taxable)

Includes:

  • Free products

  • Free trips (flights, hotels, event tickets)

  • Complimentary services

  • Discounted items received in exchange for promotion

📌 These must be declared at market value.

Is Influencer Income Business Income or Other Income?

LHDN categorises influencer income based on frequency and intention:

✅ Business Income

If activities are:

  • Continuous

  • Organised

  • Profit-oriented

Examples:

  • Full-time influencers

  • Consistent paid collaborations

  • Running influencer activity like a business

➡ Taxed under Section 4(a) of the Income Tax Act 1967
➡ Required to keep records and may need to register a business / Sdn Bhd

⚠️ Other Income

If activities are:

  • Occasional

  • Non-systematic

  • Not a primary source of income

➡ Taxed under Section 4(f)

Allowable Tax Deductions (If Treated as Business Income)

Influencers may claim expenses wholly and exclusively incurred for income generation, such as:

  • Content creation equipment (camera, phone, lighting)

  • Internet & software subscriptions

  • Advertising & promotion costs

  • Professional fees (accountant, company secretary)

  • Travel expenses (if directly related to work)

❌ Personal expenses are not deductible.

Record-Keeping Requirements

LHDN requires influencers to keep proper records for at least 7 years, including:

  • Invoices

  • Payment statements

  • Contracts with brands

  • Proof of non-cash benefits received

  • Expense receipts

Failure to maintain records may result in:

  • Estimated tax assessments

  • Penalties and fines

Common Compliance Mistakes Highlighted by LHDN

  • ❌ Assuming free products are not taxable

  • ❌ Not declaring overseas brand income

  • ❌ Mixing personal and business income

  • ❌ Not registering for income tax

  • ❌ No documentation for sponsorships

Penalties for Non-Compliance

Under the Income Tax Act 1967, undeclared influencer income may lead to:

  • Additional tax

  • Penalties up to 45%

  • Possible prosecution for serious cases

What Influencers Should Do Now (Practical Steps)

✔ Register a tax file with LHDN
✔ Assess whether income qualifies as business income
✔ Consider registering a sole proprietorship or Sdn Bhd
✔ Maintain proper records
✔ Get professional tax advice early

How iComSec Can Help

If you are:

  • A full-time influencer

  • A content creator scaling income

  • Receiving frequent brand deals

iComSec can assist with:

  • Business registration (Sdn Bhd / sole prop)

  • Tax compliance setup

  • Ongoing company secretarial support

👉 Contact iComSec today to stay compliant and avoid unnecessary penalties.