The more successful and well-known an influencer is, the more income can be earned with online content and advertising. Influencers are practically marketing themselves. This is based on the marketing of one's own personal rights. Personal rights include naming rights, image rights, participation in advertising, paid press appointments, etc. The social media accounts therefore represent assets that are subject to tax depreciation. The “value” of personal rights therefore increases with increasing awareness and reach. These are inextricably linked to the names of influencers.
Your own name as an asset
In its ruling of 12.06.2019 — X R 20/17 — the Federal Court of Justice has already ruled that naming rights represent an asset under income tax law.
The guiding principle of the decision is:
1. The commercializable part of a natural person's naming right constitutes an asset under income tax law, regardless of whether it is (finally) transferable under civil law.
It is true that the Federal Court of Justice ruling concerned the naming rights of an athlete. However, this constellation can be transferred to the influencer's personal rights, as in both variants, the value of the name and its marketing increases with the level of recognition of the respective person.
The personal rights of influencers therefore also represent economic assets. Personal rights even represent necessary business assets, which are invested at the beginning of the takeover of the business into the company. In doing so, a value of the asset to be entered is entered into the opening balance sheet, although the activation ban in accordance with Section 5 II EStG does not apply because the values of personal rights were created in the influencer's private assets even before the start of the commercial operation.
How much is a name worth?
Assets and thus also the personal rights of influencers are subject to ongoing depreciation, with the result that they reduce their profit in this way and therefore also have to pay less tax.
The influence of the personal rights filed and the reduction in the tax burden should not be underestimated, because business revenue depends very much on the reach and level of recognition of the influencer, meaning that personal rights are very important.
Assume that the influencer has income of 150,000€ due to his various social media accounts. The tax rate is 42%, meaning that the tax is 63,000€.
The influencer receives the 150,000€ not only for his service, but also because he has a corresponding level of recognition and reach. The share of the service and the share of personal rights is a question of individual case.
How long can a name be tax deducted?
The higher the share of personal rights/social media accounts, the higher the tax depreciation option. The example is therefore based on a ratio of 25% on the service and 75% on personal rights and social media accounts, so that the personal rights/social media account accounts for a share of €112,500.
If durability is applied, a multiplier of 13.75 applies in accordance with Sections 199 II, 200 I, 203 I BewG. The rating of the personal rights/ social media account is therefore 1,546,875€.
In which period a depreciation is carried out has not yet been clarified by the court, which is why this is based on depreciation for a goodwill of 15 years, so that the depreciation amounts to 103,125€.
This means that with an annual income of 150,000€, 103,125€ can be written off, so that the taxable income is only 46,875€.
