YouTube has revealed that starting from June 2021, they will tax all creators outside the United States. While this may sound normal to U.S residents, it is a totally new and surprising update to creators outside the U.S. According to YouTube, they have the responsibility under Chapter 3 of the U.S Internal Revenue Code to collect tax information from all monetizing creators outside of the U.S and deduct taxes in certain instances when they earn income from viewers in the U.S.
The earnings from U.S viewers can come from ad views, YouTube Premium, Super Chat, Super Stickers, and channel memberships. Starting from May 31 this year, creators outside the United States will be required to submit their tax information in AdSense, even if they are paid by an MCN.
How to submit YouTube tax information in AdSense.
Before doing so, make sure your tax information is valid and accurate.
- Login into AdSense
- Click on payments
- Under settings, click on manage settings.
- Click on manage U.S tax information and fill in the following forms appropriately.
How much YouTube will tax creators outside the US
Creators will be taxed based on three points;
- If your valid tax form has been submitted.
- How much your channel earns from U.S viewers.
- If your country has a tax treaty with the U.S.
• If you submit valid tax information, you can go to your AdSense payment section and see your tax withholding rate. A withholding rate can range from 0 to 30% depending on one’s country. According to YouTube, your tax withholding rate only applies to revenue coming from United States viewers. If you fail to submit your tax information after the said date, YouTube will presume you are from the U.S and will withhold up to 24% of your total revenue worldwide, not just revenue earned from U.S viewers anymore.
• If your country has a tax treaty with the U.S, it can reduce your tax withholding rate. Creators will just need to submit their tax information and claim a treaty benefit.
How to claim YouTube tax treaty benefit in AdSense
- Login to your AdSense account
- Click on Payments
- Click on the tax identity section
- Provide your foreign tax identification number and U.S tax identification number.
YouTube does recommend creators should do that immediately before the change takes effect in early June 2021.