It was only at the end of 2025 that we reported "Finfluencers” without a proper license would be penalised. But today, the Lembaga Hasil Dalam Negeri Malaysia (LHDN) has introduced new tax guidelines that require social media and digital influencers to declare all forms of income. Here's what influencers and KOLs (key opinion leaders) should know.
What Counts as Taxable Income for Influencers
Under the updated guidelines, influencers must treat a broad set of earnings as taxable income. This includes direct payments from social media platforms, brand ambassador fees, consultancy and talent fees, merchandise sales and royalties tied to online personas.
Importantly, LHDN emphasises that non-monetary benefits with monetary value, such as free products, gifts and services received from collaborations or promotions, must also be declared as part of total income. LHDN’s definition reflects a recognition that influencer activities, while sometimes informal, generate significant value and should be treated like conventional business earnings for tax purposes.
Recordkeeping and Allowable Deductions
Influencers are required to keep detailed records of all income received and supporting documentation for a minimum of seven years. This includes proof of non-cash compensation such as product receipts, voucher values or documented services. LHDN notes that certain allowable expenses, like internet costs and expenses related to filming and editing, may be claimed under Section 33 of the Income Tax Act, although personal or capital expenses are not deductible.
Broader Compliance Context
These changes signal a shift toward treating influencer activities more formally under Malaysian tax law, aligning domestic policy with global trends in taxing digital content creators. As the creator economy grows, tax authorities worldwide, including Malaysia’s LHDN, are increasingly focused on clarifying obligations and ensuring that non-cash perks are not overlooked when assessing taxable income.
Failure to declare income accurately can lead to audits and adjustments of tax assessments, putting influencers on notice about the importance of compliance and proper documentation in their financial reporting. Stay tuned for more trending tech news at TechNave.com.
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