YouTube imposing taxes on non-US Creators this year
US video sharing giant YouTube posted an update on taxes that would impact non-US monetizing Creators later this year.
In a video posted yesterday (March 10), YouTube said Creators outside of the United States will begin to have taxes deducted from their US earnings as early as June 2021.
The reason for the development comes from parent company, Google. The world's largest search engine cited a "responsibility" under Chapter 3 of the US Internal Revenue Code to "collect tax information from all monetizing creators outside of the US. And, in certain instances, to deduct taxes when these creators earn income from viewers in the US. These US earnings can come from ad views, YouTube Premium, Super Chat, Super Stickers, and Channel Memberships."
In the upcoming weeks, Creators outside of the US will be asked to submit their tax information through Google Adsense.
We all know how mentally grueling it can be having to figure out tax responsibilities as a normal citizen of any country. Thankfully, Youtube posted a step-by-step guide on their Creators channel which simply explains all you need to do right now in order to comply:
And comply, you must. If Google doesn't receive a non-US Creator's tax forms by the time these changes come into effect, Google will be required—by law—to presume that you are a US Creator if you have an individual Adsense account.
That means, until Google has a Creator's complete tax information, the company may withhold up to 24 percent of your total earnings worldwide—not just your US earnings.
How much will a non-US Creator be taxed? That will depend on three main factors: submitting a valid tax form, how much your channel earns from US viewers, and if your country has a tax treaty with the United States.
The video posted above goes into great detail into where and how you can calculate the amount from the first two factors directly from a Creator's Adsense and Google Analytics accounts.
The third factor on tax treaties can be resolved through a simple Google search, and yes, according to our very own Bureau of Internal Revenue, the Philippines does have a tax treaty with the United States. By including the tax treaty information, a Creator's tax withholding rate may be reduced even further, so it's worth checking out.
Predictably, YouTube's announcement video has currently earned as many dislikes as it has likes, garnering an almost 50 percent ratio from all sides. Taxes are certain in life, as US founding father Benjamin Franklin popularized, so it's best to comply with the law and see how it will impact a Creator's earnings in the near future.