A YouTube creator from outside the United States could soon see that up to 30% of their earnings on the platform generated by American viewers are withheld as taxes. The Google-owned video service has asked its creators to submit their tax information in order to determine if and how much of a tax impact on their income from US viewers. This would affect YouTube Partner Program creators around the world, including India, starting in June this year.
“Under US tax law, Google must withhold tax when non-US creators earn income from viewers in the US. We ask creators to submit relevant tax information to determine whether to some US tax withholding applies, and where applicable we will withhold US tax from creators’ earnings starting later this year, ”said a YouTube spokesperson. The company has asked its creators to submit information, including their tax identification numbers and estimated US revenue, before May 31.
While the tax ranges from 0 to 30 percent, depending on factors such as the nature of the creator (individual or organization) and various tax treaties the US has with other countries, not submitting the tax information within the stipulated time would mean that Google would assume that the creator is a US citizen and would retain 30 percent of their earnings, which is the highest level.
According to YouTube, the tax withholding rate on royalties for valid claims made under India’s tax treaty with the US is 15 percent. The same for the United Kingdom and Canada is set at 0 percent, and for South Korea and Mexico at 10 percent. The platform said that Google has a responsibility under Chapter 3 of the US Internal Revenue Code to collect tax information from all creators who monetize outside of the US and withhold taxes in certain cases when they earn income from them. viewers in the US
For example, if an Indian creator, who is part of the YouTube Partner Program, earns $ 1,000 per month for his content on YouTube, and this $ 100 is earned from US viewers, the tax will only be withheld on this $ 100. This income could be obtained from any of YouTube’s monetization tools, such as YouTube premium, super-chat, super-stickers, and channel memberships.
While this may affect a large number of YouTube creators, even within India, the individual impact on the majority of Indian creators is not expected to be significant, said a company executive, suggesting that the majority of the gains Generated by the creators based in India are from the Indian audience.