In a piece of upsetting news for creators based on YouTube all over the world, they now need to pay taxes for their earnings. Google said it would begin deducting US taxes from payments to creators.
The creators who have been enjoying a great subscriber base and earning big on YouTube have to pay taxes from now on. This move from Google will impact thousands of YouTube creators’ communities in India and other countries.
YouTube will begin deducting US taxes from payments to creators as early as June 2021 from the creators outside the US. If the creator doesn’t submit tax information by May 31, they may have to pay up to 24% of their total earnings, and if they submit the rate will be 15% of the earnings just from viewers in the US.
The tax deductions on earnings include earnings from viewers in the US through ad views, YouTube Premium, Super Stickers, Channel Memberships, and Super Chat. The earnings from YouTube will be considered royalties from a US tax perspective. Also, Google is updating the terms of service for creators from the US and also outside the US.
Google also gave an example to determine how much a YouTube creator has to pay in taxes.
- If the creator earning $1000 revenue in a month and doesn’t submit the tax info, the tax would be $240.
- If the creator earns $1000 and $100 from it is generated by US views, and if the tax info is submitted, the total tax deduction would be $15. This applies only if the creator submits tax info and claims a treaty benefit (the US and India have a tax treaty relationship).
- If the creator submits tax info but is not eligible for a tax treaty, the final tax would be 30% of earnings from US viewers, which would be $30 in the example here.
There are more than 1700 Indian YouTube Channels with more than 1 million subscribers.