Influencer marketing: what legal and tax status should influencers have?
Brand communication strategies are currently being disrupted by the rise of social networks.
The legal qualification of the contractual relationship between the brand and the influencer has strong implications for both parties, both in terms of social security and taxation.
In France, there is no legal status for influencers
The Advertising Self-Regulatory Authority (ARPP) defines influencers as individuals”express an opinion or give advice, in writing, audio and/or visual, in a specific area and according to a style or treatment that is their own and that their audience can identify..
Despite the colossal financial flows generated by these new kinds of economic players, the legislator has still not intervened to give them a legal status suited to their activity.
To qualify the contract, each case must therefore be considered separately.
Development of an analysis grid to classify the contract between the brand and the influencer
Four main areas of attention should be kept in mind:
An intermediary, such as an agent, may be appointed to make the introduction and the terms of his service must also be specified.
In addition to the brand’s services or products allocated free of charge to the influencer, the contract may provide for fixed remuneration (depending on his audience), variable remuneration calculated according to the turnover generated, recurring remuneration for an ambassador of the brand, etc.
The parties to the contract
The methods of production and distribution of editorial content: photo, video, speech, text, etc
The remuneration of the partnership
The duration of this agreement.
Services may be one-off or repeated over a period of time. The brand may also wish to subsequently use the influencer’s initial service (image, video, speech, text).
The influencer’s employment status depends on the contract classification
In France, when the contractual relationship is analyzed as a service, the influencer comes under the regime of self-employed workers. He is therefore a commercial partner responsible for his social declarations.
On the other hand, if the influencer is placed in a situation of legal subordination with regard to the brand which uses its services or benefits from the presumption of employee status of the models which is applied to it provided for in articles L.7123-2 and L.7123-3 of the Labor Code, the influencer will be qualified as an employee.
The qualification of the contractual relationship as an employment contract implies for the brand compliance with the regulations on fixed-term contracts, the rules applicable to working hours, health and safety rules, etc.
Financially, the brand is responsible for submitting the influencer’s remuneration to social security contributions.
Failing this, the brand risks an action for requalification of the contractual relationship, or even the reinstatement of the sums paid to the influencer in the basis for calculating social security contributions.
Anticipate tax rules for brands and influencers
In France, if the agreement is legally similar to a modeling contract, the remuneration is subject to income tax in the category of salaries and wages.
However, the remuneration due to the model on the occasion of the exploitation of the recording by the employer is not considered as a salary when the physical presence of the model is no longer required and his remuneration depends on the income of this operation. Remuneration of this nature then falls under non-commercial profits.
For the part of the remuneration qualified as salary, in addition to the payment of social contributions, the company located in France plays the role of collector of the tax due by its employee in respect of the income it pays him.
A withholding tax must therefore be applied, whether the influencer is a French or foreign tax resident. In the event of a breach, the employer is liable to penalties calculated on the basis of the amount of the withholding tax which should have been paid.
Depending on the influencer’s tax residence, an in-depth analysis of the bilateral tax treaty between France and his State of residence will eliminate the risk of double taxation.
Given the proliferation of these lucrative collaborations and the obligation of transparency relating to sponsored content, it can be expected that targeted controls will be reinforced, especially since the tax administration has been authorized to use automated manner the personal data freely accessible on the platforms. .