Freelance content creators have to pay tax on the donations they receive from their viewers.

Live auctions, project donations or tips for specific content are a source of income for thousands of freelance content creators. However, they should be aware that they are not tax-exempt.
The musician who performs live on Instagram and receives one-off tips via platforms such as PayPal. The illustrator of a streaming service who offers a flash sale of caricatures on Twitch that are made immediately after ordering. An online content creator who launches a crowdfunding campaign on Patreon to publish a specific series of tutorials. A digital marketing expert offering express consulting hours to their followers for a limited time. These are just a few examples of the sources of income that freelancers, known as content creators, can earn that are not exempt from paying taxes to the tax authorities.
Creators who offer these special rewards should be aware of how this one-off additional income is taxed. With the exponential growth of the digital economy, “more and more content creators are faced with doubts about how to declare their income correctly. The diversity of platforms and the nature of the income means that many self-employed people are unclear about their tax obligations”.

Under which section of the IAE should influencers be registered to be taxed for their work?
The way in which this additional income is taxed depends on how it is earned and the type of digital platform.
The way this additional income is taxed depends firstly on how it is earned and secondly on the type of digital platform. Nevertheless, freelancers who earn income via digital platforms such as Twitch or YouTube must fulfil the following tax obligations:
In terms of VAT, they must issue invoices for the services provided and apply the applicable VAT, which in Spain is 21%. This requires them to be registered in the register of entrepreneurs, freelancers and taxable persons and to submit a quarterly (form 303) and annual (form 390) VAT return.

With regard to VAT, they must issue invoices for the services provided and apply the applicable VAT, which is 21% in Spain. This requires them to be registered in the register of entrepreneurs, freelancers and taxable persons and to submit a quarterly (form 303) and annual (form 390) VAT return.
As far as income tax is concerned, income must be declared in the quarterly income tax return (form 130 or form 131 if it is an objective estimate) and at the end of the year in the income tax return (form 100). In order to correctly determine the taxable base, it is essential to keep accurate records of all income and expenses related to the activity.
Taxation can vary greatly depending on the platform and type of income. “On Patreon, for example, the income generated is generally considered by the tax authorities to be services, so the corresponding VAT must be applied. And in terms of personal income tax, this income would be added to the tax base for economic activities.”

In the case of a live event organised by a Twitch streamer for charitable purposes, the donations received are exempt from VAT but must be declared as extraordinary income for income tax purposes. “And their taxation can vary depending on the frequency and amount of the donations.

How the creation and sale of digital products such as courses or manuals are taxed
Commissions for sales generated by publications on social networks are automatically considered income from economic activities. As such, they are subject to the corresponding VAT and are taxable for income tax purposes.
In the case of the creation and sale of digital products such as one-off courses, specialised webinars or e-book-like products, digital freelancers who generate income in this way must register with the tax authorities under the Economic Activities Tax (Impuesto de Actividades Económicas) 961.1:

With regard to VAT, the type of customer and their geographical location are decisive. If the customer is a private individual within the European Union and the transaction exceeds €10,000, the VAT of the consumer’s country is applied (UOSS rules). If the customer is a business within the EU, VAT does not have to be charged, but the transaction must be reported on form 349. For customers outside the EU, sales are not subject to VAT.
As far as income tax is concerned, income from the sale of digital products is included in the tax base for economic activities and reported in the quarterly and annual income tax return (IRPF). The tax expert once again reminded that it is important “to keep a detailed record of all sales and to correctly apply the VAT rules depending on the location of the customer and the type of customer, whether it is an individual or a company”.
As general advice, we suggest that self-employed digital content creators “take good tax advice that will save them a lot of hassle while meeting their tax obligations and optimising their tax situation”.