Millions of people are currently earning by making and posting videos, on the American social media giant, the largest video sharing platform on the internet, YouTube.
But this year onwards YouTube will be taking tougher stance on tax fees that are applied to the US-based content creators (no problem yet right) but also from the people who do not reside inside the United States of America.
According to an email by YouTube which was sent to all the YouTube creators said that, "We’re getting in touch because Google is said to deduct U.S. taxes from earnings to creators living outside of the U.S. this year (as early as June 2021). Over the course of the next few weeks, we’ll be requesting the content makers to submit your tax info in AdSense to decide the correct amount of taxes to deduct if any apply. If your tax details are not submitted by May 31st, 2021, Google may be required to deduct up to 24% of your entire earnings worldwide."
The US Internal Revenue Code under chapter 3, according to the US Government, Google is responsible to cumulate tax information from content creators who do not live in the United States.
Google also outlines an example of this impact to clarify the taxation process.
For Example, A Creator in Pakistan earns $1,000 in revenue from YouTube in the month of February. Of the $1000 in total revenue, their channel generated $100 from viewers living in the United States.
Here are some possible scenarios:
If the content Creator does not submit tax details then the final subtraction is $240 because the withholding tax rate, if you don’t submit a form, is up to 24% of total earnings. This means that until YouTube/Google have your detailed tax information, they will need to cut up to 24% of your total income worldwide – not just your U.S. earnings.
If the content Creator submits tax details and declares a treaty benefit then the Final tax deduction can be $5. This is probably because Pakistan and the U.S. have a tax treaty relationship that reduces the tax rate to 5% of earnings from the audience in the U.S.
If the content Creator submits tax details but is not qualified for a tax treaty then the Final tax deduction is $30. This is because the tax rate without a tax treaty is 30% of earnings from the people watching in the U.S.
But this year onwards YouTube will be taking tougher stance on tax fees that are applied to the US-based content creators (no problem yet right) but also from the people who do not reside inside the United States of America.
According to an email by YouTube which was sent to all the YouTube creators said that, "We’re getting in touch because Google is said to deduct U.S. taxes from earnings to creators living outside of the U.S. this year (as early as June 2021). Over the course of the next few weeks, we’ll be requesting the content makers to submit your tax info in AdSense to decide the correct amount of taxes to deduct if any apply. If your tax details are not submitted by May 31st, 2021, Google may be required to deduct up to 24% of your entire earnings worldwide."
The US Internal Revenue Code under chapter 3, according to the US Government, Google is responsible to cumulate tax information from content creators who do not live in the United States.
Google also outlines an example of this impact to clarify the taxation process.
Photo: Smith Collection/Gado / Getty Images
For Example, A Creator in Pakistan earns $1,000 in revenue from YouTube in the month of February. Of the $1000 in total revenue, their channel generated $100 from viewers living in the United States.
Here are some possible scenarios:
If the content Creator does not submit tax details then the final subtraction is $240 because the withholding tax rate, if you don’t submit a form, is up to 24% of total earnings. This means that until YouTube/Google have your detailed tax information, they will need to cut up to 24% of your total income worldwide – not just your U.S. earnings.
If the content Creator submits tax details and declares a treaty benefit then the Final tax deduction can be $5. This is probably because Pakistan and the U.S. have a tax treaty relationship that reduces the tax rate to 5% of earnings from the audience in the U.S.
If the content Creator submits tax details but is not qualified for a tax treaty then the Final tax deduction is $30. This is because the tax rate without a tax treaty is 30% of earnings from the people watching in the U.S.
