YouTube it makes it quite easy for anyone with talent and determination to make money by producing videos and many even manage to make a living off the platform. This year, however, many creators may face problems as YouTube prepares to deduct taxes in the U.S. for all creators, even those who don’t live in the region.
An email to YouTube creators living abroad warns of a change in YouTube payments. Apparently, Google now has to deduct U.S. taxes from all channels, even from owners of creators who do not reside in the United States. The email says:
We’re contacting why Google will have to deduct U.S. taxes from payments to creators outside the U.S. later this year (as early as June 2021). Over the next few weeks, we’ll ask you to submit your tax information to AdSense to determine the correct amount of tax to deduct, if any. If your tax information is not provided before May 31, 2021, Google may deduct up to 24% of your total worldwide earnings.
This change in the way YouTube manages taxes comes from the U.S. government, specifically in Chapter 3 of the U.S. Internal Revenue Code. Google is responsible for collecting tax information from all creators who generate revenue outside the United States and withholding taxes when revenue is earned. spectators within the US. This means that not all revenue will be affected, but only that earned by U.S. viewers. A short YouTube video explains all the changes.
Turned on a support pageGoogle also clearly explains an example of this impact, including the note that tax treaties can help many creators. In some countries, tax treaties may reduce the impact of this tax change or eliminate it altogether, as is the case in the United Kingdom.
Example: A creator wins in India $ 1,000 in YouTube revenue last month. Of the € 1,000 of total revenue, its channel was generated $ 100 of U.S. viewers.
Here are some possible retention scenarios:
- The creator does not send tax information: The final deduction is $ 240 because the tax rate withheld if you do not submit a form is up to 24% of total income. This means that until we have complete tax information, we will be required to deduct up to 24% of your total worldwide income, not just income in the United States.
- The creator sends tax information and claims a treaty benefit: The final tax deduction is $ 15. This is because India and the United States have a relationship of tax treaties that reduces the tax rate to 15% of viewer revenue in the US
- The creator submits tax information, but does not meet the requirements for a tax treaty: The final tax deduction is $ 30. This is because the tax rate without a tax treaty accounts for 30% of viewers ’income in the US
This change no they affect the creators of the United States, but they will affect the rest of the world. YouTube needs updated tax information by the end of May, otherwise a default reduction of 24% will be made, which would obviously be detrimental to many who rely on the platform to make a living.
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