YouTube To Charge Tax From Creators Based Outside US

YouTube has announced that they will start deducting tax from payouts of creators who are based outside of the US, in a bad news for YouTubers across the world.

How is YouTube Charging Tax?

The announcement was made via an email sent to content creators on the platform. Importantly, YouTube has asked the creators to submit their tax details to AdSense latest by 31st May, 2021. Also, the Google-owned video sharing platform has asked the creators to take this seriously. Otherwise, Google will automatically deduct 24% of their total earnings, as per the email. For example, if a creator does not submit their tax details, 24% of their total worldwide earnings will be withheld.

However, there are some scenarios to this as well.

1. If the creator submits their details and is from a country with which the US has a tax treaty, they will only be paying 15% of their total US earnings.
2. If the creator is not eligible for a tax treaty, 24% of their US earnings will be deducted
3. However, should the creator fail to submit any details, 24% of their worldwide earnings will be deducted.

For example, if you are a YouTuber and you made $1000 this month, out of which $100 was made in the US, here is how deductions will be done, corresponding to the points mentioned above.

1. 15% of $100 = $15
2. 24% of $100 = $24
3. 24% of $1000 = $240

This will adversely affect Indian YouTube Community which consists of a lot of small YouTubers. Moreover, many of these are minors who will have a hard time submitting proper tax details.

Reactions are yet to come on this move.