YouTube Tax Requirements for Content Creators Outside United States Explained

YouTube is a platform where anyone with talent or a project can emerge and generate income. Some even dedicate full time to the platform. However, YouTube may once again be in the eye of the storm for new financial changes. The company is preparing to deduct taxes for all content creators, even if you don’t live in the United States.

The email sent to YouTube content creators living abroad notifies a change in the payments of the platform. Google is now expected to deduct taxes for the US from all channels, including those that are outside the United States.

New financial change

The email reads: “We are communicating that Google will have to deduct US taxes from earnings to content creators outside of the US later in the year (as of June 2021). Over the next few weeks, we will ask you to submit your tax information in AdSense to determine the correct amount of tax to deduct, if applicable. If your tax information is not provided by May 31, 2021, Google may need to deduct up to 24% of your total income all over the world.”

This change comes directly from the United States government, specifically Chapter 3 of the Internal Revenue Code. For example, a content creator in India who makes $ 1,000 in revenue from YouTube in the last month. Of the $ 1,000 total, $ 100 is from US viewers.

So these would be the possible scenarios:

  • The creator does not submit tax information: Final deduction is $ 240 because the withholding rate is 24% if they do not submit tax information of total earnings.
  • The creator presents tax information and claims a benefit of the treaty– the eventual tax deduction is $ 15. It may vary depending on whether the United States has a tax agreement relationship with the creator’s country.
  • Creator submits tax information, but is not eligible for a tax treaty:  If the content creator’s country does not have a tax treaty with the United States, the final tax deduction is $ 30.

Many content creators achieved fame on YouTube, but due to changes in their policies, several have moved to other platforms such as Twitch or Facebook Live, where they feel more comfortable. We’ll see if this tax change will end up affecting creators who are still on YouTube.

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