Currently, social networks have become an excellent source of income for many people. However, many users still do not know or are not very clear about how to declare their income to the tax authorities and thus avoid fines. One of these social platforms where many users are monetizing is Twitch given the boom in streaming and online gaming.
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What kind of taxes do you need to declare if you monetize on Twicth?
It is mistakenly believed that if income is generated below the Minimum Interprofessional Salary or if these are not regular, it is not necessary to declare taxes. In fact, the tax form 037 has tax headings that are perfectly adapted to content creators. Everything will depend on what kind of activities you do on Twitch:
961.1 – Motion Picture Production
844 – Advertising, public relations and similar services
899 – Other professionals related to services
As for the types of taxes as such, when receiving income on Twitch, VAT and IRPF must be declared, regardless of whether you work as a freelancer or as a company. IRPF varies from 19% to 47% depending on the income obtained and VAT is 21%.
How do I declare if I am a freelance content creator on Twitch?
As long as your income does not exceed the SMI, it is not mandatory to register in the RETA (Special Regime for Self-Employed Workers) as self-employed, although you must declare that income as an economic activity. Now, when you start receiving constant monthly income if you have to register. If you have doubts about how to register, in the following link you can see all the details on how to register as self-employed.
What some users usually do is delay registration until their income exceeds the SMI. But this is a risk, since the Treasury or Social Security can fine you, because for these two entities, any income must be declared. Another option is to register only with the Treasury, but this will only be effective if your income varies drastically and is not fixed on a monthly basis.
The most advisable thing in these cases is to resort to a tax consultancy for the self-employed such as Declarando to advise you on your current situation and how you should proceed to avoid incurring economic sanctions.
What if I start as a limited company?
Although the most usual is to start receiving income in social networks as a freelancer, if you are going to start your digital projects with a group of people and dedicated infrastructure, then a limited company will be the most suitable option. In these cases, our limited company will declare through corporate income tax. Keep in mind that if we declare as a limited company, we will have to get used to inspections by the Treasury.
How do I report my earned income on Twitch?
The first thing is to register both with the Treasury and with social security. Once this procedure is done, you must do the following:
Every three months you must present the VAT model 303 and the IRPF model 130. Annually you must present the income statement and the VAT model 390
What if I don’t declare my income?
Well, both the Treasury and Social Security will fine you for not having registered and for carrying out economic activities without declaring. Keep in mind that the fines are usually much higher than the undeclared amount (double in many cases).
