YouTube is going to start charging US tax on videos made by non-USians

[Delicieuxz]

 

It seems that YouTube is going to start applying US income taxes to views of videos watched in the US, even if the video-maker and uploader lives outside the US and isn't a US citizen. The result, from what I think I understand, is that people in non-US countries will be paying income taxes twice on views from the US: Once for their own country, and again for the US.

 

I think it's a bad-sounding move, and one that sounds like video makers outside the US will be getting cheated of their profits. And on top of all the other moves YouTube has made in previous years clamping-down on video profits, I wonder how much more difficult this move will make getting a full-time professional YT channel going from scratch.

 

[TempestCatto]

With all this new revenue coming in, does that mean those 40 year old potholes will finally get filled?

[Bitter]

4 minutes ago, TempestCatto said:

With all this new revenue coming in, does that mean those 40 year old potholes will finally get filled?

That's not a nice thing to say about Detroit, Chicago, New York, Cleveland, Buffalo, Dayton, Erie, Flint, Rochester, South Bend, Toledo, Youngstown

[Bombastinator]

That’s between you and the tax man.  If you’re paying taxes on income made in another country to your country it’s your country that is screwing you not YouTube.  Or you’re not making international declaration in which case the screwer isn’t YouTube or the US government or your national government, it’s you.  Double taxes are paid sometimes though. 
 

If that is the result it would be fairly normal for some business situations. Money made in the US is taxed under US rules just as money made in another country is taxed under their rules.  What this sounds like is people are starting to make enough money as YouTube personalities that the amount of tax is greater than the cost of moving. They’ll move to some country without tax on a particular thing (Monaco, no income tax.  Cayman Islands, has something slightly different but it can make a difference) US taxes are almost ridiculously low as developed nations go, so in many places fees could go down not up.  I could see them going up in some situations though.

[Delicieuxz]

1 minute ago, Bombastinator said:

That’s between you and the tax man.  If you’re paying taxes on income made in another country to your country it’s your country that is screwing you not YouTube.  Or you’re not making international declaration in which case the screwer isn’t YouTube or the US government or your national government, it’s you.  Double taxes are paid sometimes though.

It sounds to me like it won't be avoidable:

 

"Over the next few weeks, you’ll be asked to submit your tax information in AdSense. This video shows you what you need to do."

 

YouTube will have the income and tax information, and will have the ability to take taxes out of earnings before giving them to people. And if someone outside of the US somehow doesn't pay US taxes on their videos, YouTube would probably know and shut-down their channel if they don't pay.

[Bombastinator]

2 minutes ago, Delicieuxz said:

It sounds to me like it won't be avoidable:

 

"Over the next few weeks, you’ll be asked to submit your tax information in AdSense. This video shows you what you need to do."

 

YouTube will have the income and tax information, and will have the ability to take taxes out of earnings before giving them to people. And if someone outside of the US somehow doesn't pay US taxes on their videos, YouTube would probably know and shut-down their channel if they don't pay.

Not seeing the problem there.  That’s how taxes work.  What could be an issue is if for example YouTube Italy is charging US taxes on something only watched in Italy.  That should be Italian tax (which is a lot higher) If something is international and views occur in a variety of places YouTube might have the ability to separate each view by National system. Such things are often a nightmare though, then requiring professional tax preparation.  It could get bad enough that it would possibly be cheaper to request that views in a selection of nations be demobilized so as not to generate tiny amounts of revenue that would be used up in tax preparation.  The people who will be really hosed by this are people with entire or almost entire US audiences who moved out of the country to something like Monaco or the Cayman Islands or something.  For a YouTube doing this from almost any developed nation taxes will go down assuming they’ve been paying them at least. 

[CarlBar]

5 hours ago, Bombastinator said:

Not seeing the problem there.  That’s how taxes work.  What could be an issue is if for example YouTube Italy is charging US taxes on something only watched in Italy.  That should be Italian tax (which is a lot higher) If something is international and views occur in a variety of places YouTube might have the ability to separate each view by National system. Such things are often a nightmare though, then requiring professional tax preparation.  It could get bad enough that it would possibly be cheaper to request that views in a selection of nations be demobilized so as not to generate tiny amounts of revenue that would be used up in tax preparation.  The people who will be really hosed by this are people with entire or almost entire US audiences who moved out of the country to something like Monaco or the Cayman Islands or something.  For a YouTube doing this from almost any developed nation taxes will go down assuming they’ve been paying them at least. 

 

I think your not understanding this right. That or my usual communication issues are rearung their head.

 

The point isn't about where somone pays taxes. Rather lets say you Bombastinator watch a youtube video of mine, (i don;t have a youtube channel but lets say i did for the example). Whenever you watch an ad on my video i get US taxes deducted from the ad revenue of your view before it's [paid to em here in the UK. At that point i have to declare that money I've been paid to the UK tax office and they will tax me Uk income tax on the money i received after US tax deductions.

 

I actually have to wonder how legal this is in some countries. I imagine most don;t have any laws about ti because it's such an unusual situation. But national laws tend to produce at least one worldwide exception damm near all the time.

 

 

[RejZoR]

6 hours ago, TempestCatto said:

With all this new revenue coming in, does that mean those 40 year old potholes will finally get filled?

Potholes = pockets of certain individuals. Those will certainly get filled...

[porina]

Tax is complicated and not something you can plan on based on a quote in a news post. Anyone affected will have to look into how the details affects them.

 

I used to work for the UK subsidiary of a US HQ company. I'd get shares listed in the US, and when I disposed of them, I had to fill in US form W-8BEN which essentially declares I'm not liable to pay tax in the US so no funds are withheld for US taxation. The funds are subject to UK tax.

[CarlBar]

51 minutes ago, porina said:

Tax is complicated and not something you can plan on based on a quote in a news post. Anyone affected will have to look into how the details affects them.

 

I used to work for the UK subsidiary of a US HQ company. I'd get shares listed in the US, and when I disposed of them, I had to fill in US form W-8BEN which essentially declares I'm not liable to pay tax in the US so no funds are withheld for US taxation. The funds are subject to UK tax.

 

The issue here is that it seems YouTube will be taking the tax money off before they pay you, so you don;t get the opportunity to make a deceleration like that.

[porina]

53 minutes ago, CarlBar said:

The issue here is that it seems YouTube will be taking the tax money off before they pay you, so you don;t get the opportunity to make a deceleration like that.

I'm not motivated enough to look up the details of exactly what YouTube are doing, or if I even can as I'm way too small for that.

 

Again drawing from my earlier example, how that worked was that the share broker withheld US tax from everyone unless you provide to them certification you are exempt. So if similar were to work here (not saying it is!) then by default YT would hold applicable US taxes, unless you can show them they shouldn't and they can release the full amount. The detail will be in just what tax information you have to/can provide to them and what they do with it.

[Jet_ski]

1 hour ago, CarlBar said:

The issue here is that it seems YouTube will be taking the tax money off before they pay you, so you don;t get the opportunity to make a deceleration like that.

I don’t think these are income taxes. YouTube could only withhold income tax from their employees and contractors who are US residents or citizens.

 

What might be happening is export/import tariffs and customs! From the US government’s perspective, any YouTuber who isn’t a US resident but has audience in the US is essentially importing goods/services to the US. Therefore depending on the bilateral relations between the two countries, YouTube would be required by law to collect tariffs/customs as they are the middle man here.

 

Given the timing of this announcement, along with other US tariffs, I wouldn’t be surprised if this was implemented by the previous US administration and went under the radar as so much was happening. It coincides with the  electronics tariffs they past last year.

[Bombastinator]

4 hours ago, CarlBar said:

 

I think your not understanding this right. That or my usual communication issues are rearung their head.

 

The point isn't about where somone pays taxes. Rather lets say you Bombastinator watch a youtube video of mine, (i don;t have a youtube channel but lets say i did for the example). Whenever you watch an ad on my video i get US taxes deducted from the ad revenue of your view before it's [paid to em here in the UK. At that point i have to declare that money I've been paid to the UK tax office and they will tax me Uk income tax on the money i received after US tax deductions.

 

I actually have to wonder how legal this is in some countries. I imagine most don;t have any laws about ti because it's such an unusual situation. But national laws tend to produce at least one worldwide exception damm near all the time.

 

 

Yeah.  The issue with corporations in general is sometimes things get taxed twice.  Corporation pays taxes then pays out to a private individual who gets taxed again where it gets taxed as income.  Been that way for a really long time. The difference here is instead of the us taxing twice it’s once by the nation where the income is generated, then again as income in the the nation of the user.  The US has a somewhat different tax allocation ratio than other developed nations though in that it fell for the concept of “flat tax” concept some years ago which effectively means it taxes lower incomes more heavily and higher incomes less heavily than most other developed nations, so a smaller income might see a heavier tax than was previously the case. There has as recently as last year even still been attempts to push it farther with claims that wealthy Americans are “overtaxed”.  They haven’t gone very far.

[Vanderburg]

4 hours ago, CarlBar said:

 

The issue here is that it seems YouTube will be taking the tax money off before they pay you, so you don;t get the opportunity to make a deceleration like that.

If you're not subject to withholding, then it will be returned to you at tax time.

[TetraSky]

In a way, I get why they would be doing this and wouldn't be surprised if other countries joined in.

Still shit for creators though.

[Bitter]

I mean I have to pay foreign income tax on investments that generate income in foreign countries that collect income tax, this isn't that much different? You're making income here more or less the same as if you were selling a good or service here that generated you income so you pay income tax here. Youtube probably doesn't get a say in this, there's likely some clarification getting issued from the IRS about this subject and they're just preparing for it. Knowing a few people who got caught up in tracking their own income and paying taxes on it as independent contractors it's MUCH easier if someone just sends you a bill vs figuring it out correctly yourself or paying an accountant to do it for you. There may even be some tax benefits with this such as more easily classifying yourself as a business and deduct expenses from your taxes like say a nice camera or a rippin new computer.

[bcredeur97]

13 hours ago, Bitter said:

That's not a nice thing to say about Detroit, Chicago, New York, Cleveland, Buffalo, Dayton, Erie, Flint, Rochester, South Bend, Toledo, Youngstown

and all of Lousiana. 

My state is so poor lol


I am confused by this though, did some part of the US tax code change that prompted youtube to do this? 

[Bitter]

1 minute ago, bcredeur97 said:

and all of Lousiana. 

My state is so poor lol


I am confused by this though, did some part of the US tax code change that prompted youtube to do this? 

Probably or some kind of clarification was issued.

[dalekphalm]

I know people are upset because "taxes = bad", but let's look at this logically for a second.

 

First, this isn't really any different from any business that generates income in multiple companies. There may be taxes applicable to your operations in various countries.

 

With that in mind, most major countries have Tax Treaties with each other, which prevents double taxation (meaning you typically are only taxed by the country you live in). However, this isn't always straight forward.

 

It seems like YouTube is collecting the taxes - and, if these are indeed income taxes, and not some other kind - if your country has a tax treaty with the US, you will get that money back when you file your taxes.

 

However, tax law is complicated. Moreso since anyone who is a channel operator on YouTube by it's very nature, deals with income generated from multiple different countries (meaning multiple different tax laws).

 

I wouldn't get overly excited by this - if it is indeed income tax, most people will just get that money back via Tax treaties. I would want to read more about the specifics before jumping on the anti-YouTube bandwagon.

[Heliian]

When I start making money from YouTube I'll let the accountant handle that.  

 

Taxes are unfortunately a part of life.  They'll get ya from every angle.  YouTube is a business and if you intend on profiting from it, you're going to have to learn how to keep the tax man happy. 

 

There's also a great quote from late us president Ronald Reagan:  “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

 

 

[Sakkura]

It's funny because the US whines loudly when EU countries try to tax US corporations on money made in the EU.

[poochyena]

14 hours ago, huilun02 said:

If they made this call

What makes you think youtube made this call, and not the government?

[Bitter]

21 minutes ago, Sakkura said:

It's funny because the US whines loudly when EU countries try to tax US corporations on money made in the EU.

Right? It's almost like everyones just in it for themselves or something!

[Kisai]

I'm not sure why this is even news. Any company you deal with that you earn income directly from, does this in some way or another. If you're outside the US, then you still have to pay the taxman in your country.

 

Youtube will probably require foreigners to submit W8-BEN to get that withholding tax back.

 

https://support.google.com/youtube/answer/10390801

 

Quote

Google may begin withholding U.S. taxes on earnings you generate from viewers in the U.S. as early as June 2021. Please submit your U.S. tax info in AdSense as soon as possible. If your tax info isn’t provided by May 31, 2021, Google may be required to deduct up to 24% of your total earnings worldwide. If you’re a creator in the U.S., you may have already submitted your tax info. Check your tax info in your AdSense account to be sure.

 

 

The appropriate tax form is automatically generated based on the answers you provide. If you have any doubts, consult your tax advisor.

• A Form W-9 will be required from US persons, companies, partnerships, and so on.
• Generally, a Form W-8BEN or Form W-8BEN-E is required from individuals and entities (respectively) outside of the US who are the beneficial owner of the income received. It may be used to claim a treaty benefit (in other words, a reduced rate of withholding).
• A Form W-8ECI is used by persons claiming income received and is effectively connected with a US trade or business. A US TIN will be required for all payees that provide a Form W-8ECI.
• A Form W-8IMY is required for certain intermediaries, partnerships and flow-through entities outside of the US. If this form is provided, Google may ask for additional documentation (for example, an allocation statement).
• A Form W-8EXP is used by entities to establish non-U.S. beneficial owner status and eligibility for a reduced rate of tax withholding as a non-U.S. government central bank, international organization, non-U.S. tax exempt organization, non-U.S. foreign private foundation or government of a U.S. possession.

So, this is a non-issue.

[Delicieuxz]

11 minutes ago, Kisai said:

I'm not sure why this is even news. Any company you deal with that you earn income directly from, does this in some way or another. If you're outside the US, then you still have to pay the taxman in your country.

 

Youtube will probably require foreigners to submit W8-BEN to get that withholding tax back.

 

https://support.google.com/youtube/answer/10390801

 

So, this is a non-issue.

It's news because it's a new thing that Google is implementing. And even if people can get any withheld income back from Google, it'd still be important for video-uploaders to be aware that they need to file this information otherwise Google might deduct up to 24% of their worldwide earnings, as they say in what you've quoted.