What Business Expenses Can Vloggers Deduct?

Introduction

Vloggers, influencers, and other social media creators who earn income from digital platforms are generally treated as persons engaged in trade or business. Their receipts may come from advertising revenue, platform payments, subscriptions, memberships, sponsorships, commissions, merchandise, and non-cash benefits.

These creators may deduct legitimate business expenses from gross income, but only when the expenses satisfy the requirements of the National Internal Revenue Code of 1997, as amended. Camera equipment, software, internet subscriptions, editing services, and business-related travel may qualify, subject to proper classification, reasonableness, and documentation.

Tax Treatment of Social Media Creators

Revenue Memorandum Circular No. 97-2021 recognizes social media influencers, whether individuals or corporations, as taxpayers receiving income in cash or in kind from social media platforms. Individual creators other than corporations and partnerships are generally treated as self-employed persons or individuals engaged in trade or business.

Income received in kind must also be reported at its fair market value. For example, a creator who receives a smartphone, camera, accommodation, or other property in exchange for promotional services may have taxable income even if no cash was paid.

Citizens residing in the Philippines and domestic corporations are generally taxable on income from sources within and outside the Philippines, while other taxpayers are generally taxable on income from Philippine sources, subject to the applicable rules under the Tax Code.

General Rule on Allowable Business Deductions

Section 34(A) of the National Internal Revenue Code allows the deduction of ordinary and necessary expenses paid or incurred during the taxable year in carrying on, or directly attributable to, the development, management, operation, or conduct of a trade, business, or profession. The current provision is found in the [National Internal Revenue Code of 1997, as amended](#L1.90).

In general, an expense must meet all of the following conditions:

• It is ordinary and necessary. The expense must be common and accepted in the relevant business and appropriate or helpful to its operations.
• It is paid or incurred during the taxable year.
• It is connected with the creator’s business. The expense must be incurred in carrying on the creator’s activities or be directly attributable to producing or realizing business income.
• It is properly substantiated. The taxpayer must maintain invoices, receipts, contracts, records, and other documents showing the nature, amount, and business purpose of the expense.

The Supreme Court has held that a taxpayer claiming a deduction must identify the legal provision authorizing it and prove entitlement to the deduction. Mere assertions that an expense is ordinary and necessary are insufficient. This rule was explained in “Atlas Consolidated Mining & Development Corporation v. Commissioner of Internal Revenue,” G.R. No. 26911, January 27, 1981.

Examples of Potentially Deductible Expenses

Camera and Production Equipment

Cameras, microphones, lighting equipment, tripods, computers, smartphones, and similar tools may be connected with content production. Their tax treatment depends on their nature, cost, useful life, and the accounting method properly applied.

Equipment that provides benefits beyond the taxable year is generally treated as a capital asset rather than as an immediately deductible expense. The cost may instead be recovered through depreciation over the asset’s useful life, subject to the applicable rules and adequate records.

A creator should maintain the purchase invoice, proof of payment, asset description, date placed in service, business-use percentage, and depreciation schedule. If an item is used partly for personal purposes, only the reasonable business-use portion should be claimed.

Internet and Communication Services

Internet subscriptions, mobile data, telephone services, and communication expenses may be deductible when they are directly connected with content creation, platform management, livestreaming, client communication, or other income-producing activities.

Where a household or personal internet connection is also used for business, the creator should allocate the expense using a reasonable and consistently applied method. The full amount should not automatically be claimed unless the records establish that the service is exclusively used for business.

Software and Digital Subscriptions

Video-editing applications, graphic-design programs, cloud storage, music licenses, stock-media subscriptions, scheduling tools, website hosting, cybersecurity services, and similar digital services may qualify when they support the creator’s business.

The creator should preserve subscription invoices, payment confirmations, contracts or license terms, and records identifying the business purpose. Personal entertainment subscriptions should not be deducted merely because they are used while working.

Editing, Production, and Professional Services

Payments to video editors, graphic designers, researchers, camera operators, virtual assistants, accountants, lawyers, and other independent contractors may be deductible when the services are actually rendered and directly connected with the business.

The creator should document the engagement through a written agreement, invoice or receipt, proof of payment, and evidence of the services delivered. Applicable withholding-tax obligations must also be considered. Under the Tax Code, a payment that is otherwise deductible may be disallowed when the required tax was withheld but not properly remitted.

Business-Related Travel and Transportation

Travel, transportation, accommodation, and meals may qualify when incurred while attending a production, meeting a client, covering an event, or performing another business activity. The expense should be supported by receipts and a record of the date, destination, business purpose, and persons or project involved.

Personal vacations, leisure trips, and expenses for family members are not deductible merely because some content was produced during the trip. If a trip has both business and personal purposes, only the properly allocable business portion should be claimed.

Marketing, Advertising, and Giveaway Costs

Advertising, promotional campaigns, contest prizes, giveaway items, and marketing services may qualify when they are incurred to promote the creator’s business or generate income.

However, advertising expenses must still be ordinary, necessary, reasonable in amount, incurred during the taxable year, connected with the business, and supported by records. In “Commissioner of Internal Revenue v. General Foods (Phils.), Inc.,” G.R. No. 143672, April 24, 2003, the Supreme Court explained that an advertising expense that is unusually large and primarily intended to create or maintain goodwill may be treated as a capital expenditure requiring amortization rather than an immediate deduction.

Home-Office Expenses

A proportionate share of rent, electricity, water, and other occupancy expenses may potentially be claimed when a specific portion of the home is used for the creator’s business. The allocation must be reasonable and supported by records.

A creator should consider the area used for business, the frequency of business use, and the nature of the activity. Expenses that are purely personal or unrelated to the production of income should not be included.

Bank, Payment-Platform, and Shipping Charges

Bank charges, payment-processing fees, platform commissions, currency-conversion charges, and shipping costs connected with business transactions may qualify as deductions. The records should show the transaction, amount, date, and relationship to the reported income.

Equipment Purchases Versus Ordinary Expenses

Not every business-related purchase may be deducted in full during the year of purchase. Ordinary recurring expenses may generally be deducted in the year paid or incurred if all requirements are satisfied. Long-term assets, such as cameras, computers, and production equipment, may require capitalization and depreciation.

The Supreme Court has distinguished ordinary business expenses from capital expenditures. In “Atlas Consolidated Mining & Development Corporation v. Commissioner of Internal Revenue,” G.R. No. 26911, January 27, 1981, the Court emphasized that an expenditure must fall within the statutory language authorizing the deduction and must be substantially proved by evidence or records.

As a general guide, a creator should ask:

• Does the purchase provide a continuing benefit beyond the current taxable year?
• Is it an asset used in producing business income?
• Is it partly used for personal purposes?
• Does the amount and nature of the purchase support capitalization and depreciation?

Itemized Deductions and the Eight-Percent Tax Option

Creators using the itemized-deduction method may claim allowable expenses under Section 34 of the Tax Code, provided that the requirements for deductibility and substantiation are met.

Self-employed individuals whose gross sales or gross receipts and other non-operating income do not exceed the VAT threshold of ₱3,000,000 may generally elect the eight-percent tax on gross sales or gross receipts and other non-operating income in excess of ₱250,000, in lieu of the graduated income-tax rates and percentage tax, subject to the applicable registration and election requirements.

A creator who properly elects the eight-percent option generally does not separately deduct itemized business expenses in computing the eight-percent tax. The creator should therefore compare the expected tax result and compliance burden before choosing between the graduated rates with deductions and the eight-percent option.

Revenue Memorandum Circular No. 97-2021 also explains that mixed-income earners may have compensation income and business or professional income. Their business income may be taxed under the graduated rates or, when the statutory conditions are met, under the eight-percent option. If the applicable gross-receipts threshold is exceeded, the graduated rates and VAT rules may apply.

Documentation and Recordkeeping

Proper documentation is not a mere administrative formality. Under the Tax Code and relevant BIR guidance, an expense may be denied when the taxpayer cannot establish its amount, business purpose, timing, and connection with taxable income.

Creators should keep the following records:

• BIR-registered invoices and receipts;
• contracts with advertisers, platforms, agencies, and contractors;
• bank statements and payment-platform records;
• equipment purchase documents and depreciation schedules;
• business-use computations for shared expenses;
• travel itineraries and production records;
• proof of withholding-tax compliance when applicable; and
• records of non-cash compensation and its fair market value.

Revenue Memorandum Circular No. 081-2025 reiterates that deductible expenses must be ordinary and necessary, paid or incurred within the taxable year, connected with the conduct of the business, and supported by invoices, records, or other pertinent papers. It also emphasizes that expenses related to tax-exempt or finally taxed income are not deductible against regular taxable income.

Common Expenses That May Be Disallowed

The following expenses may be questioned or disallowed when the creator cannot establish their business connection or proper amount:

• personal clothing, meals, vacations, and entertainment;
• the personal-use portion of household utilities or internet services;
• equipment claimed as an immediate expense when it should be depreciated;
• payments without invoices, receipts, or proof of actual service;
• excessive promotional expenses lacking a reasonable business explanation; and
• expenses incurred to earn income subject to a separate final tax or income that is exempt from tax.

Entertainment, amusement, or recreation expenses must also be directly connected with, or directly related to, the development, management, or operation of the business. Expenses contrary to law, morals, public policy, or public order are not deductible, and the applicable ceilings prescribed by the Secretary of Finance must be observed.

Illustrative Example

Assume that a registered vlogger earns income from platform advertising and brand sponsorships. During the year, the vlogger pays for video-editing software, internet service, freelance editing, transportation to a paid production, and a camera used for both business and personal activities.

The software, business-use share of internet service, freelance editing, and properly documented production transportation may qualify as current deductions if they are ordinary, necessary, incurred during the year, and adequately substantiated. The camera may need to be recorded as a depreciable asset, with only the reasonable business-use portion considered.

If the vlogger elects the eight-percent tax option and satisfies the applicable gross-receipts threshold, the vlogger generally cannot separately claim these itemized expenses in computing the eight-percent tax. The choice of tax method should therefore be made before filing the relevant return and maintained consistently as required by the tax rules.

Recommended Compliance Steps

1. Register the business activity and applicable tax types with the Bureau of Internal Revenue.
2. Separate business and personal bank accounts and payment channels where possible.
3. Request compliant invoices or receipts for business purchases and services.
4. Maintain a written record of the business purpose of each material expense.
5. Classify equipment as an asset when it provides benefits beyond the current taxable year.
6. Apply a reasonable allocation for expenses used partly for business and partly for personal purposes.
7. Compare itemized deductions with the eight-percent tax option before making the election.
8. Report cash and non-cash income and comply with applicable withholding, income-tax, percentage-tax, or VAT obligations.

Conclusion

Vloggers and social media creators may deduct genuine business expenses, including production equipment, software, internet services, contractor fees, business travel, marketing costs, and payment charges. The deduction is not automatic: the expense must be ordinary and necessary, incurred in the taxable year, connected with the business, and supported by reliable records.

The most important distinction is between recurring operating expenses and capital assets. Creators should also determine whether itemized deductions or the eight-percent tax option is more suitable, taking into account the ₱3,000,000 gross-receipts threshold, the ₱250,000 reduction applicable under the eight-percent computation, and the creator’s actual level of deductible expenses.

Careful registration, separation of personal and business spending, proper invoicing, and timely tax advice can substantially reduce the risk of disallowed deductions, deficiency assessments, penalties, and interest.

About Nicolas and De Vega Law Offices

 Nicolas and de Vega Law Offices is a full-service law firm in the Philippines.  You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines.  You may also call us at +632 84706126, +632 84706130, +632 84016392 or e-mail us at [email protected]. Visit our website https://ndvlaw.com.