Influencer marketing: what legal and tax status should influencers have?
Brand communication strategies are currently being turned upside down by the rise of social networks.
The legal classification of the contractual relationship that binds 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 French Advertising Self-Regulatory Authority (ARPP) defines influencers as individuals "expressing an opinion or giving advice, in writing, audio and/or visual, in a specific field and according to a style or treatment that is their own and which their audience can identify".
Despite the colossal financial flows generated by these economic players of a new kind, the legislator has still not intervened to give them a legal status adapted to their activity.
In order to classify the contract, it is therefore necessary to consider each case separately.
Developing an analysis grid to classify the contract between the brand and the influencer
Four main areas for attention should be kept in mind:
- The parties to the contract An intermediary, such as an agent, may be responsible for making the introduction and the terms of his/her service must also be specified.
- The methods of producing and disseminating editorial content: photo, video, speech, text, etc.
- The remuneration of the partnership In addition to brand services or products awarded free of charge to the influencer, the contract may provide for a fixed remuneration (depending on his/her audience), variable remuneration calculated on the basis of the turnover generated, recurring remuneration for a brand ambassador, etc.
- The timeframe of this agreement.
The services may be one-off or repeated over a certain period of time. The brand may also wish to use the initial service of the influencer at a later date (image, video, speech, text).
The employment status of the influencer depends on the classification of the contract
In France, when the contractual relationship is analysed as a service, the influencer comes under the self-employed workers' regime. Therefore, he/she is a business partner responsible for his/her social security declarations.
On the other hand, if the influencer is put in a situation of legal subordination with regard to the brand that uses his/her services or has the presumption of salaried status of models applied to him/her provided for in Articles L.7123-2 and L.7123-3 of the French Labour Code, the influencer will be classified as an employee.
The classification of the contractual relationship as an employment contract, for the brand implies compliance with the regulations on fixed-term contracts, rules applicable to working hours, health and safety rules, etc.
In financial terms, the brand is responsible for making the influencer's remuneration subject to social security contributions.
Failing this, the brand risks action to reclassify the contractual relationship, or even the reinstatement of sums paid to the influencer in the basis for calculating social security contributions.
Anticipating tax rules for brands and influencers
In France, if the agreement is legally similar to a modelling contract, the remuneration is subject to income tax in the salary and wages category.
However, the remuneration due to the model on the occasion of the exploitation of the recording by the employer is not considered like a salary when the model's physical presence is no longer required and his/her remuneration depends on the income from that exploitation. Remuneration of this nature then comes under non-commercial profits.
For the part of the remuneration classified as salary, in addition to the payment of social security 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 to him/her.
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 that should have been paid.
Depending on the tax residence of the influencer, the in-depth analysis of the bilateral tax treaty between France and his/her State of residence will make it possible to eliminate the risks of double taxation.
Given the multiplication of these lucrative collaborations and the obligation to have transparency relating to sponsored content, we can expect that targeted checks will be stepped up, particularly since the tax authorities have been authorised to use personal data freely accessible on the platforms in an automated way.
