Background: When does a hobby become a taxable business?

Posting stories, showing products, entering into collaborations – many influencers start out as hobbyists, but quickly realize that their reach is growing, requests are coming in and suddenly money is flowing in.

What many people don’t know is that as soon as you generate income with your online activities, you are no longer operating as a hobby, but may be running a taxable business. And that has consequences, both from a tax and legal perspective.

Which taxes are relevant?

If you earn money as an influencer or receive products for free, you will be subject to three types of tax:

Income tax:
You must declare your profits (income minus expenses) in your income tax return – even if you are only active “on the side”.

Trade tax:
This is due if your profit exceeds €24,500 per year. This mainly applies to larger creators or content professionals.

Sales tax:
As soon as you have regular income, you are “entrepreneurially active” – which means you have to deal with the topic of sales tax.

VAT: When to charge it – and when not to charge it

From the point of view of the tax office, you are an entrepreneur as soon as you regularly generate income with cooperations, advertising posts or product placements. Then the following applies:

Small business regulation (less bureaucracy):

• Turnover in the previous year under € 22,000
• Turnover in the current year expected to be below € 50,000
• In this case, you do not have to charge VAT, but you are also not allowed to deduct input tax (e.g. for a camera or laptop).

Standard taxation (fully taxable):

If you exceed these limits, you must

• Show sales tax on invoices (usually 19%)
• Send advance VAT returns to the tax office
• Claim input tax, i.e. reclaim sales tax from your expenses

Example: Cooperation with € 1,000 fee

You receive a fee of €1,000 from the company for an advertising campaign:

As a small business owner:in
you do not charge VAT, receive €1,000 and keep this amount – but must pay tax on the profit.

With standard taxation
You must declare sales tax:

• Invoice amount: 1,000 € + 19 % VAT = 1,190 €
• You pay the € 190 sales tax to the tax office
• For example, you can deduct the 19% from the purchase of your new smartphone for business as input tax

What about gifts and free products?

Influencers often receive products, hotel accommodation or invitations to events – free of charge, but with a clear quid pro quo (e.g. post, story, tagging).
Please note: This also counts as income for tax purposes – the value of the goods must be taxed.

Example: You receive a high-quality camera set worth €2,000 to report on it. Although you don’t receive any money, this counts as income for tax purposes.

What you need to do:

• Register a business if you do regular collaborations
• Fill in the tax registration questionnaire online via ELSTER
• Document income and expenses (e.g. via EÜR)
• Issue invoices correctly – with or without VAT
• Document free products with value – e.g. via screenshot & price information

What happens if you do nothing?

• Back payments with interest
• Penalties or fines
• Tax audits or even investigative proceedings

The tax office is becoming increasingly active – especially with publicly visible advertising campaigns, collaborations or hashtags such as #sponsored.

Our tip:

As soon as you start generating income with your channel, you should also have everything on screen from a tax perspective – right from the start.

👉 We help you to be legally compliant and tax-smart – from your first post to your next tax return. book your first aid consultation now.