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Non-US YouTube creators to be taxed for US viewers

YouTube channels monetising users accounts tax US
Unsplash/NordWood Themes

YouTube creators outside the United States need to brace themselves as Google is set to deduct US taxes from their earnings.

On 9 March, the company announced that non-US creators with monetized content would be taxed according to the amount of revenue made from US viewers.

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If creators do not comply, Google could begin withholding payments as early as June 2021.

The company also uploaded a video explaining the changes to its YouTube Creators account.

It’s up to Google to tax YouTube accounts

Under Chapter 3 of the US Internal Revenue Code, Google has to collect tax information on all of its monetizing creators outside the country. It also has to deduct taxes when creators are making money from viewers in the US.

Going forward, YouTube will ask creators to file their tax information on their Google AdSense account. Under the payments option, there is an option for users to manage their US tax information.

The option will also determine what kind of tax form they will need to fill out.

How much will YouTube tax creators?

YouTube will tax non-US creators based on several factors.

The first is whether creators have filed a tax form on Google AdSense. They will then have access to their tax withholding rate which is typically between 0% and 30%, depending on their country.

The rate is then applied to monthly earnings from US viewers. You can find the geographical earnings of your account on YouTube Analytics.

If creators do not submit a tax form by 31 May, Google will assume the account owner is a US citizen and will tax them accordingly.

As a result, until creators file a tax form, the company may withhold up to 24% of the account’s global earnings.

Creators from countries that have a tax treaty with the US have a lifeline. If a country does have a treaty, Google AdSense will instantly offer the treaty benefit to creators.  If creators claim a treaty benefit, the tax amount may be lower.

There is a convention between South Africa and the United States to prevent double taxation. The agreement has been in place since 1998.

“Under Article 12, royalties derived and beneficially owned by a resident of a Contracting State may also be taxed only in the State in which the owner of the income resides,” the agreement says.

You can view the agreement on both the US IRS and the SARS website.

The company has shared more information about the requirements in its US tax requirements for YouTube earnings FAQ.

Feature image: Unsplash/NordWood Themes

Read more: YouTube introduces more age-restriction features

Editor’s note and update: This article initially incorrectly stated that South Africa does not have a tax treaty with the US. Thank you to reader Daniel Fourie for noting the error.

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