Google will soon be required to deduct US taxes from YouTube creators’ earnings, even if they are outside the US. Get all the key details here.
Creators are being asked to submit relevant tax info by 31st May via AdSense to avoid having 24% of their worldwide revenue taxed. This comes as changes require earnings generated from US viewers to be taxed, in line with US tax rules. These are earnings from viewers in the U.S. through ad views, YouTube Premium, Super Chat, Super Stickers, and Channel Memberships.
As a creator, you will have put a lot of time and work into earning money through YouTube videos. It’s important to ensure you submit your tax information to avoid having more earnings deducted than necessary. The rate you will be taxed depends on whether your country has a tax treaty with the US. You can expect deductions of your US earnings to be between 0 – 30%. You can find additional information and links in this Google support post from YouTube.
A sample calculation to help you understand this concept
Example: A Creator in India earns $1,000 in revenue from YouTube in the last month. Of the $1000 in total revenue, their channel generated $100 from U.S. viewers. Here are some possible withholding scenarios:
- Creator doesn’t submit tax info: Final deduction 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 we have your completed tax info, we’ll need to deduct up to 24% of your total earnings worldwide – not just your U.S. earnings.
- Creator submits tax info and claims a treaty benefit: Final tax deduction is $15. This is because India and the U.S. have a tax treaty relationship that reduces the tax rate to 15% of earnings from viewers in the U.S.
- Creator submits tax info, but is not eligible for a tax treaty: Final tax deduction is $30. This is because the tax rate without a tax treaty is 30% of earnings from viewers in the U.S.