VAT Deductions for Social-Media Influencers: An Article in Calcalist

For a social-media influencer, the home also serves as a studio, and a family event can double as a campaign — making it difficult to distinguish between a private expense and a business input. In an article published in Calcalist in August 2025, Adv. (CPA) Shlomi Vaknin and Adv. Daniel Raz argue that a large share of expenses that appear private actually serve the influencer directly in VAT-liable transactions, and that the input-tax deduction rules should be interpreted flexibly.

According to the article, an influencer who receives a product in exchange for promotion — for example, a living-room set or a kitchen for their home — is conducting a barter transaction. Two VAT-liable transactions occur here: the sale of the product and the advertising service, with each party issuing an invoice at the prevailing market price pursuant to Section 10 of the VAT Law. The open question is whether the influencer may deduct the input VAT on the product when it is used for photo and video shoots on behalf of multiple advertisers. The authors compare the home to a furnished studio that an advertiser would have rented in the past.

Input tax is deductible when the asset or service was acquired for business purposes, and under Section 41 of the VAT Law a nexus to a taxable transaction is required (the matching principle). The authors note that according to CA 460/00 Maman, an input that advances the business as a whole is deductible unless it can be attributed to an exempt transaction, and that according to Tax Appeal 113/96 Mitzpe Masua, the deduction is forward-looking. For mixed use, Regulation 18 of the VAT Regulations allows a deduction of 67% when the predominant use is business-related and 25% when it is predominantly non-business.

According to the article, there is still no established case law dealing directly with social-media influencers. The authors argue that an influencer's business is their private life, and therefore inputs that would be considered personal for any other business operator actually serve the influencer in taxable transactions, both present and future. They compare the investment in audience-building to a development company that invests before generating revenue, and note that in barter transactions the nexus to a specific taxable transaction is even clearer.