from Hacker News

YouTube tells foreign creators they will soon be charged American tax

by irockzz on 3/10/21, 2:12 PM with 211 comments

  • by tristanj on 3/10/21, 3:47 PM

    This RT article is clickbait and spreading misinformation. The tax is on revenue generated from users in the US, not on all revenue. If creators provide no tax information at all, only then will YouTube tax all global revenue. And YouTube is not doing so by choice, they're a US headquartered company and forced to do this to comply with US tax law.

    RT is highlighting tweets that are spreading misinformation. For example:

    > I'm so confused, @YouTube and @AdSense are updating their terms so that all Non-U.S. Creators now have to pay American Taxes on all of their earnings.

    No, it's on US sourced income. RT clearly knows this tweet is untrue, in the third paragraph they explain this is only on US sourced revenue, yet they still promote it.

    Another one:

    > It seems that even if you live outside of the US, and are not a US citizen and therefore owe the IRS no taxes

    No, it's US sourced income, therefore the US government can levy taxes on it.

    Another one:

    > You are really giving a huge middle finger to creators who now have to pay DOUBLE TAX.

    No, they are only double taxed if the country they reside in does not have a double taxation agreement with the US. More than 60 countries have a double taxation agreement with the US. I believe the majority of creators will not double taxed.

    The title and contents are chosen to promote maximum outrage. Even a cursory reading of the original source https://support.google.com/youtube/thread/101463270 dispels these claims.

    This article should be replaced by the original source.

  • by mrweasel on 3/10/21, 3:04 PM

    That seems like a potentially risky move from YouTube. Won't every other country now demand that they do the same for them?

    This is going to be extremely confusing for creators. I can't imagine anyone but the very largest YouTubers being able to handle getting taxed in multiple countries and figure out what exactly they need to pay at home.

    Actually, the large YouTubers may be better of simply demonetizing they videos and just sell sponsored videos and embedded ads directly.

  • by the_svd_doctor on 3/10/21, 3:16 PM

    But why? If you’re not physically present in the US and are not a US citizen, why would you be subject to (income) tax? Or is that not a form of income tax, but something else?

  • by Macha on 3/10/21, 3:12 PM

    So for investments in the US I know there is a double taxation treaty. For both degiro (EU based) and fidelity (US based), I had to follow the W-8 process which basically boils to "I am a citizen of eligible country X, here is my government ID number, I've ticked this box which asserts this to be a factual claim and understand that it's legally fraud if not true, and I can provide documentation to this effect if the US government comes asking". Then the platforms withold payments to the value of my own country's tax requirements and eventually provide it to my country. I think there might be a provision to pay any surplus US tax if my own country's tax liability is lower than what the US would have charged, but it's much higher so that doesn't come into effect.

    If I purchase a good or service from the US, the only taxes I'm liable to pay are VAT (sales tax in American terms) and if it's above a certain value, customs charges. These are billed to me, they're not taken out of the American company's share. Companies used to dealing with the EU will show the marked up price and handle the details, most will at least use a delivery company that understands the process and then I pay via the delivery company and then only for the most clueless who've done neither will I get a postman showing up expecting payment before handing it over (or I guess if the value was high enough, a letter from customs asking for payment before they release my goods.

    None of this process subjects the American company selling me goods or services to e.g. Irish corporation tax, so I don't understand why if the process was reversed and an individual was providing them a good or service (like Google surely views creators as, I highly doubt they want them considered employees), so I don't understand why reversing the flow should subject YouTubers to US income tax. It feels to me the worst case scenario should be something like the W-8 process where the international creator files some paperwork to say they're not in the United States.

  • by DINKDINK on 3/10/21, 5:14 PM

    "I print a free newspaper. The margins are good if I put interesting-enough content in it and businesses pay me to place ads. An Indian retailer pays me for ads because my readership is high in India. Sometimes to get better content I pay writers for content. None of these people live or work in the US but the US government says if I send a free newspaper to someone in the US, the writers I hire owes them tax"

    This thread seems to be full of arguments that YouTube's product (customer eyeballs) should induce a tax for YouTube's suppliers (content creators they pay) even when YouTube's suppliers and YouTube's customers (advertisement purchasers) aren't even located in the US.

  • by bryanrasmussen on 3/10/21, 2:52 PM

    as a normal rule I believe every dollar I pay in American tax I would then deduct from taxes in my home country, the problem is not double taxation, it is a more difficult workload.

    I wonder though if there would be any interesting things loopholes this whole thing would open up actually.

    on edit: actually if I was to try to do something with YouTube given this rule I would probably want to incorporate before creating my channel, although I suppose most people would not have that recourse.

  • by nromiun on 3/10/21, 4:57 PM

    Alright, so America wants to tax every American view in YouTube. But what happens if another country decides to do the same thing? Creators will have to pay every country their views come from. I hope I am wrong, but we all know every country in the world is greedy for more tax.

  • by swiley on 3/10/21, 2:57 PM

    Is youtube really worth it at this point? You can publish using activity pub now and most youtubers are funded by patreon and paid sponsors anyway.

  • by ssijak on 3/10/21, 4:12 PM

    What was different until now? Payments to creators from youtube were not considered royalties so they were not taxable or?

  • by ketzu on 3/10/21, 4:45 PM

    My personal experience with a similar rule from Kongregate: I had to file a W-8(BEN?) [1] where I can specify the double-texation traty between my country and the US. I filed everything (with some, but not much support from kongregate) via kongregate itself. It took a bit time to look up the treaty (found on the us irs website [2]), but it wasn't too bad all in all. So no double taxation.

    I would have expected for youtube to work the same.

    [1] http://www.kongregate.com/de/pages/international-tax-faq

    [2] https://www.irs.gov/individuals/international-taxpayers/tax-...

  • by zests on 3/10/21, 4:34 PM

    Is this a new rule? I can't find anywhere that actually links or describes any new regulations but I am trying to figure out why this is just happening now.

  • by duxup on 3/10/21, 3:08 PM

  • by wastedhours on 3/10/21, 3:14 PM

    This seems similar to KDP as well - the overhead for the submission of the information through that process was (surprisingly, and perhaps naively legally speaking) simple.

    Will be interesting to see what (if any) knock on effect it will have in regards to other tax jurisdictions.

  • by tinyhouse on 3/10/21, 3:21 PM

    That sounds like something that Youtube should take care of based on their revenue in each country. They can then decide how much to pay for creators.

    I'm assuming Youtube already pay taxes in all countries they have revenue in?

  • by notwhereyouare on 3/10/21, 2:43 PM

    some prior discussion here, not much though https://news.ycombinator.com/item?id=26402707

  • by zelon88 on 3/10/21, 3:31 PM

    I remember when they took away everybody's YT partnerships and killed everyone's monetized accounts. So many niche content creators just gave up after that. Many of them worked for a long time to get part way to their first $100 payout from their YT partnership and then their accounts were closed. So YT basically has millions of dollars in stolen money that it keeps in escrow. So in the event you suddenly become famous they can reimburse you that $75 they strung you along for.

  • by ricardobayes on 3/10/21, 3:00 PM

    Is royalties a different category for US taxation than other revenue streams?

  • by brainzap on 3/10/21, 3:00 PM

    Will the tax money be used for war?

  • by corobo on 3/10/21, 2:56 PM

    Does rt.com know they can just create a collection of tweets inside Twitter?

  • by Taylor_OD on 3/10/21, 3:22 PM

    American taxes are so screwed up. Many typical hackernews folks may not be aware but potentially hundreds of thousands if not millions of people are realizing that they owe taxes on the unemployment income they received when they lost their job this year. Nothing like getting a stimulus check and then giving it all to the IRS plus some.