YouTube tells foreign creators they will soon be charged American tax | Hacker News Reader

YouTube tells foreign creators they will soon be charged American tax

rt.com

133 pointsirockzz211 comments

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.

Sorry, but this is still insane.

It makes absolutely no sense that a non-American has to pay up to 24% tax on money from American viewership, and then again pay income tax.

As far as I know, there is no other countries in the world with such an insane policy. Being subject to taxes from a country you don't belong to exactly as if you lived there (these aren't sales taxes), is completely unreasonable.

Remember, this is on top of existing sales taxes, what it really is is the US trying to double-tax non-US citizens on their income.

The title is reasonable.

I have zero love for YouTube or Google, but any ire here should be directed at U.S. law, not at them. They have no option but to comply with the law -- whether that means applying taxes to revenue from U.S. sources, or cutting off non-U.S. creators from revenue or views from U.S. sources.

I don't think YouTube or Google is collecting tax just for fun or to punish their content creators.

I agree, this is mostly an issue from the US Government.

That being said, Google has subsidiaries that cover every region of the world, if they wanted to do so they could put creator services under the dominion of those regional subsidiaries, then structuring the transfer payements to equalize the inflow/outflow as IP payments, as they do already for other services.

My country does not have double taxation treaty with US. So after Google takes its cut, then US with 30% cut, then my country with about 55% cut, plus other expenses it feels like there is no point in starting a youtube channel in 2021.

I was actually thinking about this in terms of Twitch subscriptions. If an American pays $5 to subscribe, then the creator could easily end up seeing less than $1.20 from it.

First there's a ~20% VAT on it. $4 left. Twitch takes half of that - $2. The US takes another 0-24% from it. The local taxman takes another ~40%. You're roughly left with ~$1.

Kind of depressing when you look at it like that.

It’s highway robbery.

Can you deduct the US tax paid as a business expense?

It doesn't matter because your revenue is already reduced, so you can't deduct it again. For instance, if you originally earned $1000/month from youtube with zero expenses, for a profit of $1000/month that you have to pay taxes on. With youtube withholding 30%, your new revenue would be $700/month, for a profit of $700/month. You can't take your new revenue of $700/month, deduct the $300 tax as an expense, for a final profit of $400/month.

In the USA you can get a credit on your taxes for the amount of foreign tax paid, regardless of whether it was withheld or you paid it after he fact. This can eliminate the double taxation effect. In you example, let’s say you earned $1000 in a foreign country and paid $300 foreign tax. In the US you are taxed on the $1000, let’s say $400, but you can credit the $300 and only pay the incremental $100 of tax.

However America taxes world wide income, so it may be different in your country. You should probably ask a tax or accounting expert.

This is still good deal compared to platform cut/taxing when publishing content on Envato... and there they give jack sh*t about piracy where on youtube you at least can get republished videos that belong to you taken down and continue receiving revenue...

Don't I have to pay VAT if I order a product from Europe?

That's their equivalent of sales tax. The issue here has to do with income tax, not sales tax.

How is this not exactly the same as the EU putting targeted taxes on major US technology companies to stop money from leaving their market?

Any time the US does something, the reaction is always strangely different than when other players like the EU do the same thing...

This is literally not even the remotely same thing.. The EU wants to tax companies earning money in the EU.. The US wants to tax people/companies in every other country around the world.

The US is one of those few countries with insane tax legislation. As a US citizen, you won't have a good time moving anywhere, because almost nobody wants to deal with US citizens because of the batshit crazy tax laws.

The US wants to tax companies earning money in the US.

It's exactly the same thing. EU tells US companies they have to pay money to European governments if they have European customers or users. Same is happening here in reverse.

The difference is that first, that's a business not an individual, and that European companies would have to pay the same taxes, whereas if you're, say, an Indonesian you'd have to pay local and US tax compared to an American who only pays US tax.

If you're a youtube creator making money off of showing American's ads in America that seems like earning money in America to me.

>As far as I know, there is no other countries in the world with such an insane policy.

This is inherent in being the most powerful country in the world. The US has the ability to do it, so why wouldn't they? You're not a US citizen, so the federal government cares even less about abstract fairness than they usually do.

Yes, that's why RT picked up the story, because it's a good propaganda piece that shows that the US does not care about fairness abroad, simply raw interest.

Is it still propaganda if it's true?

Well, I guess it could go both ways, but I learnt it as even if it's true it can still be propaganda - propaganda isn't inherently misleading, but you always have to be careful.

> The US has the ability to do it, so why wouldn't they?

Pretty sure being a bully is supposed to be bad. ;)

"Supposed to be", yes, but the bully only cares if the bully can be made to suffer consequences.

It's arguably not US sourced income by virtue of US viewers though.

If US people visit the UK, our shops don't charge and pay sales tax in the US.

Really it should be about where the server is I suppose, regardless of whether the viewer is American or not.

The internet is interesting and messy and laws & regulation are far from caught up.

The better analogy here is that if a German band plays a concert in the UK, they still need to pay UK taxes on their ticket sales. Even if the band is incorporated in Germany, the portion of the tour that occurred in the UK is still subject to UK taxes.

Additionally, most European countries permit duty-free sales to foreign citizens in normal stores under the right conditions (often via requiring a passport to be shown at purchase, and via refunding the taxes at airport when leaving the country). This arrangement works because, it's generally required that travelers pay customs on arrival to their home countries on goods purchased abroad anyway. That being said, I've just learnt that the UK has killed their duty-free sales system as of 2021 [1], which is just stupid.

[1] https://www.executivetraveller.com/news/uk-to-axe-duty-free-...

Sure, but likewise that's because they're in the UK.

It's not so clear that the sale or performance is in the US if it happens online.

If a band live streams a concert from a server in the UK and someone in America watches, ... I don't think it's so clear.

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

Is it more accurate to say US sourced net income? It's amazing how massive companies can put their HQ in a tax haven and avoid US taxes completely while small creators are going to have withholdings from their revenue (ie: max taxes with zero expenses until they file a return to show net income, right?).

It's a terrible deal for Canadians who will be paying US taxes without living in the US. Will they be eligible for US social programs, etc.? Why should the first 15% (IIRC) of income taxes from YouTubers go to the US? That's BS.

If I were a creator I'd already be looking into setting up two companies. One would create and license content to the second. The second would have the relationship with YouTube and would only make a very small amount of profit. That's not advice. I don't have a clue how it actually works

If it were YouTube on the hook for the taxes, you can be guaranteed there'd already be some corporate structure set up to avoid those taxes. Why can't there be a YouTube Canada that runs at a very thin (almost zero) margin by selling ad space for Canadian YouTube channels to YouTube US and paying out Canadian YouTubers with the revenue?

>Is it more accurate to say US sourced net income? It's amazing how massive companies can put their HQ in a tax haven and avoid US taxes completely while small creators are going to have withholdings from their revenue.

that's because corporations get taxed on profit, and individuals get taxed on income. profits can be rerouted to more tax-favorable jurisdictions, but it's much harder to pull off with personal income.

>It's a terrible deal for Canadians who will be paying US taxes without living in the US. Will they be eligible for US social programs, etc.? Why should the first 15% (IIRC) of income taxes from YouTubers go to the US? That's BS.

In the case of canada (and other countries with a tax treaty with the US), this is a non-issue because you either pay 0% withholding or can deduct the tax from your country's tax return (presumably the tax treaty also contains provisions for your country to net out the difference with the US).

> In the case of canada (and other countries with a tax treaty with the US), this is a non-issue because you either pay 0% withholding or can deduct the tax from your country's tax return (presumably the tax treaty also contains provisions for your country to net out the difference with the US).

This is what Intuit says for that type of income:

> If taxes were deducted from your income, you can claim those taxes as if you paid them to the CRA. Because you have a duty to report all your U.S. income on your Canadian return, the income is deemed taxable as Canadian income. The usually lower U.S. income tax rate could leave you with an amount owing for the difference between the United States and Canadian income tax rates.

So, just for the sake of an example, say I make $100, US income taxes are 15%, and Canadian income taxes are 25%. The way I understand it, I pay $15 in US tax. That's calculated as if I paid it to the CRA, so now I only owe them $10 to make up the difference.

The HUGE issue with that is that my country (Canada) only gets $10 for things like healthcare and social programs while the US gets $15 for doing exactly nothing. So it might not make a difference in terms of the money in my bank account, but it's detrimental to me in terms of a lack of funding for government services.

>The HUGE issue with that is that my country (Canada) only gets $10 for things like healthcare and social programs while the US gets $15 for doing exactly nothing. So it might not make a difference in terms of the money in my bank account, but it's detrimental to me in terms of a lack of funding for government services.

From my previous comment:

>(presumably the tax treaty also contains provisions for your country to net out the difference with the US).

either that or both countries figured that it mostly cancels out so they don't bother netting it out.

That presumably is doing a huge amount of work.

"we will soon be updating our Terms of Service where your earnings from YouTube will be considered royalties from a U.S. tax perspective (we’ve already made this change to the Terms of Service for U.S. creators in November). This may impact the way your earnings are taxed, and as required by U.S. law, Google will withhold taxes."

So you will have to file a tax return and get the money back just like every other income earner in the country. The real issue imho is that the bulk of youtubers probably aren't properly filing any returns in any country.

I have a young guy working for me who does game streaming on weekends. I think he earned a few thousand dollars last year. He had no idea that such income was taxable, that he would actually have to hand over part of it to the government despite it not coming from his fulltime job. I think he would prefer google withhold those dollars.

Can you even file an US tax return if you don't have any presence in the US? How do they even identify you if you don't have US SSN?

https://www.irs.gov/individuals/international-taxpayers/taxa...

"C. Which Form to File: Nonresident aliens who are required to file an income tax return must use Form 1040-NR, U.S. Nonresident Alien Income Tax Return"

https://www.irs.gov/forms-pubs/about-form-1040-nr

NOT YOUR LAWYER. Just providing links to a government website that explains what that government requires of people who earn US income.

Thank you. So it indeed is doable, just holy moly the forms.

Things like "Add lines 25a through 25c". Don't they have computers? Are the forms for Citizens like this too?

I guess that somebody will have to check all submissions => depending on the amount of people that earn $ through Youtube, the amount of work might increase quite a bit for the IRS?

There are many different ways other than an SSN: https://www.irs.gov/individuals/international-taxpayers/taxp...

You apply for an IRS Employer Identification Number (EIN).

https://www.irs.gov/businesses/small-businesses-self-employe...

Taxes don’t work like that, anywhere in the world. Your argument is “Someone doesn’t care or know about taxes, so this is going to cause problems to them”. Yes, indeed. As it should IMO.

I am not a tax expert, and I’m speaking from a U.S. perspective, but if the earnings are via stream donations (not ads), would that not be considered a small gift and not be taxable?

Tax law 101: You cannot turn a transaction for a product into a pair of "gifts" between the parties. Where both parties are subject to contracts for services or payments, there are no gifts. Similarly, all "gifts" from employers to employees are considered non-gift income.

A car given to an employee as a "gift" is income to the employee and a taxable deduction by the employer. See Duesenberg (I'm trying to find the citation. I only remember that it involved an expensive car given to a senior employee in the early years of US income tax.)

And there is an Andy Griffith Show episode about this, about Aunt May having to pay income tax on prizes. The tax man was played by the guy who played the priest on MASH.

"While in Hollywood, Aunt Bee wins several new appliances on a TV quiz show, but when she returns home she loses her friends as a result. William Christopher plays the IRS agent who visits the Taylors to collect taxes on the prizes."

https://en.wikipedia.org/wiki/List_of_The_Andy_Griffith_Show...

Stream donations aren’t really a transaction, though. The streamer is under no obligation to even respond to a donor, and certainly there is no employer/employee relationship.

It’s more complicated than that. A donation to a streamer is much more like a “tip” than a gift, and tips are clearly taxable despite not having any obligations associated with them.

From the relevant form: "Wages, salaries, tips, etc. Attach Form(s) W-2"

Is the streamer a listed/registered charity? If not, then donations are presumed to be taxable income.

A gift is just that, a gift. The party giving the gift isn't expecting anything in return. In the streaming example, you're providing entertainment for "gifts". That's an exchange of goods/services for monetary gain and hence taxable.

Obligatory: not an accountant/lawyer

I believe the IRS would investigate many small donations under the gift tax. An analogy would be restaurant servers claiming their tips as gifts and thus not disclosing it as income.

I’m sure there are clauses to avoid abusing gift tax as a loop hole for providing a service.

You went to great length to discredit RT but seems like they listed all the details. US double taxation laws are a joke, covering only 1/3 of the world.

How come they’re implementing this suddenly? They didn’t respect laws for years? It has nothing to do with the law.

That is a lot more reasonable. I can see other countries wanting taxes on revenue generated by their viewership as well and that would make sense too.

Yep this. RT is a dishonest propaganda outlet.

slightly OT but does anyone recommend journalism from organizations that avoid this sort of misleading information? I'm not sure if I've just become more sensitive to it but recently I feel like I can't get away from it. WSJ (non-opinion) seems to be one of the few places that tends to have accurate headlines IMO.

https://BBC.co.uk/news

I wouldn't say that they are totally unbiased, but the BBC is the most respected international news organization on the planet today. The are definitely pro-western democracy, as opposed to RT, but if the BBC broadcasts outright lies there are open processes to force corrections. The BBC has oversight whereas RT is a closed box that can do as they please.

It really isn't. The BBC publishes wrong or hopelessly biased stories all the time, which is why the majority of the British population no longer trusts them. As for processes to get corrections, as with many firms the best way to get their stories fixed is being it to the attention of blogs read by the ruling party e.g. Fawkes. Using their actual complaints procedure rarely seems to work.

RT is Russian state media, thus its propagandist, its not a real news outlet. There is no "journalism" tradition there in terms of ethics, trust, standards, etc. It follows the party line and the Kremlin's needs, which currently are to make the US/West look as bad as possible.

An important caveat is that they also post lots of normal content, so that it's harder to argue that RT should be blocked outright, and harder to identify the propaganda.

RT wants to spread misinformation on YouTube because Putin’s government wants to move Russians to Russian tech companies that can be “managed”.

not defending RT, but I've been seeing it in NYT, Verge, Bloomberg too. That's more what prompted my question.

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.

How is abiding to the U.S. law, where Google/YouTube is incorporated a "risky move"? It's not like there is a choice.

https://support.google.com/youtube/thread/101463270?hl=en

Remote workers will be screwed then. I've worked for companies incorporated in Switzerland and I live in Poland, why on earth would that make sense to pay Swiss tax if I live and work in PL?

Also Alphabet is a Delaware incorporated company - tax haven, plus there's the good ol' tax haven of Dublin that FANGs love and Google is located in, like Facebook, Amazon, insert other multi-billion turnover company.

For anyone interested in Ireland's tax loopholes: https://www.irishtimes.com/business/economy/explainer-google...

Many companies are incorporated in Delaware because it has a highly functioning secretary of state and court system. It's not at all a tax haven, having a state corporate tax rate that's around the 6th highest of the 50 states.

This. You incorporate in Delaware not because it's a tax haven, but because they have the most developed corporate law of any state, and the chancellor/vice chancellors on the Delaware Court of Chancery are without a doubt among the best judges on corporate issues that you will find anywhere in the world.

> most developed corporate law of any state

Honestly this just sounds like the old Swiss tax rules of 'we never disclose your details, even to the feds'.

No, it's nothing like that. Businesses like Delaware because they can easily hire lawyers that know Delaware law, and those lawyers can say with a good degree of certainty that the law means X or Y, because many businesses before them have already settled the case law there.

This is not the case for every state. In some states, your specific business legal concern might be something that is not clearly outlined under the text of the law, and there may be a complete lack of case law to guide your lawyer.

TL;DR: lawyers in Delaware are more likely to answer "yes" or "no" rather than "maybe" to your business law question.

My impression is that tax laws don't necessarily make sense. Rather, they embody the attempts of the politicly powerful to shift tax burden onto others.

In your case, the power imbalance would come from Poland (or the EU?) not prioritizing your situation in trade negotiations with Switzerland. And your inability to force the EU to change that.

That's my working theory anyway. Happy to be corrected.

Should google pay tax to Poland for ad rev sales made in Poland?

This is no different.

You do know that they are incorporated in Dublin too, right alongside all the tech companies - because it's a tax haven.

https://www.irishtimes.com/business/economy/explainer-google...

Why does this matter? They can be incorporated in Dublin, but the new rules still apply to a Polish youtuber.

Because of the original argument being that it's a US incorporated company when in fact it's an EU incorporated too therefore why would a EU based creator pay US based taxes when clearly Google is functioning and registered in the EU?

Google is a multinational, they have a subsidiary in almost every single country. If they wanted, they could operate the local YouTube creator services under every jurisdiction not to charge this tax, and may very well be forced to.

I thought that was a strange phrasing as well?

Since when is YouTube more powerful than national governments? People seem to be under some confusion as to how business works. The governments tell YouTube what YouTube has to do to operate in their jurisdiction, and YouTube either does it, or leaves that jurisdiction.

If Togo made the demand, you can leave. If the US or Germany make the demand, you say, "Right away sirs", and you start collecting their taxes.

Then I guess EU should do the same.

Americans on YouTube should pay taxes in EU on EU ad views or YouTube should leave EU.

But I think in practice EU is thinking more in direction of simply taxing global profits of tech giants.

Tax global income of a company not based in EU for doing business in the EU? Is that what you mean?

Yes, EU seems to be looking to establish rules to determine how much profit a company generated in the EU and tax that [0].

> The new rules will also change how profits are allocated to Member States in a way which better reflects how companies can create value online: for example, depending on where the user is based at the time of consumption.

Seems like currently EU is in the process of public consultations on a new digital taxation [1].

I'm not sure how the details changed since the proposal, or where they will go. But EU is certainly moving on it.

[0] https://ec.europa.eu/taxation_customs/business/company-tax/f...

[1] https://ec.europa.eu/info/law/better-regulation/have-your-sa...

Isn't Google conveniently abiding to Chinese law in China as well? How does your logic work?

Except that Google is an American company.

OP just argued that the reason why Google abides to US law is because it's a US company. Their actions however show they abide to whichever laws are more convenient for them.

What's the problem with my logic? Google has to abide the law of countries with which it does business.

Abiding laws is not a "convenience", it's something you just do. If you don't you get fined: e.g.: https://www.reuters.com/article/us-france-tech-google-tax-id...

The problem with Google being an American company in this case is that maybe you can pull out of China or Australia if the law becomes too cumbersome, but pulling out of the country you are based in is an order of magnitude harder. I feel that you have interpreted my sentence in the worst possible light, but ok.

That makes sense to me. Which actions show they’re violating any law in any country?

It might be a surprise to you, but most of us aren't fond of being subjected to foreign laws.

Other gouvernement will take notice.

In the same TOS change Google added a point where they say that they can show their own ads on demonetised videos https://support.google.com/youtube/answer/10090902?hl=en

Well, they are hosting and streaming and re-encoding them for free

You really think they do this for altruistic reasons?

No, but it's weird when people get annoyed that Google are putting ads next to the videos

Probably not. The US is one of few (two?) countries with tax policies that cross jurisdictions like these, and so far there doesn't seem to be much of a pushback from other nations. Might have something to do with who has more aircraft carriers.

But yeah, YouTubers are going to be confused. And it makes me wonder, what's next? What about ad revenue from Google / Facebook? Or is that handled through their offices in Ireland?

> Won't every other country now demand that they do the same for them?

What other countries have major services like YouTube that pay their content creators in the US where they could 'do the same for them'?

I think they meant that Spain can now demand Youtubers to pay tax for money they made from Spanish viewers on Youtube. Etc.

Right - my point was YouTube can just not show the videos to viewers in Spain. The company isn’t based there - it can forget about it if it wants. What would Spain do about it?

Are you suggesting Youtube stop showing their videos outside the US? You're probably not aware that Youtube has far more users internationally. They will get crashed.

It would be a pretty effective deterrent against foreign governments attempting to collect tax revenue on views from within their own jurisdiction.

Not sure that anyone will do so, but I think this is what GP is saying.

At the same time, giving up a market will give another competitor a golden oppurtunity which could come to bite them. And countries could probably somehow force Google to continue operating Youtube there by threatning other Google products.

I kinda doubt it. Youtube's "moat" against competition is the fact that storing, processing, and serving video is insanely expensive. Google can only afford to do it to begin with because they are the world's largest digital advertising company.

It would have to be another player willing to invest a ton upfront, and continue burning ludicrous amounts of capital over many years before they could actually compete

I mean the competitor could also be large company, for example, dailymotion.com could take over from Youtube without any major hassle. And EU would probably love it since dailymotion is local company.

This would be great, could lead to creation of several national level alternatives.

Google has offices and/or servers in almost every country. Spain could simply say "your data moves through our cables, pay up".

That's not a bad thing. It's also probably not onerous for a company with the resources of Google to deal with. The technical work is already done to handle the US.

Nobody made any money from Spanish viewers... they made money from YouTube.

You are hellbanned btw.

They are making money from Spanish viewers - Spanish YouTube premium and Spanish advert impressions.

YouTube makes money from Spanish YouTube Premium subscribers and Spanish companies buying ad slots. Spanish YouTubers make money from YouTube.

YouTube is operated by Google Ireland Limited, which is not in the US, so your base argument is flawed...

I don't know which Alphabet subsidiary the payments to creators actually come from, but YouTube itself is headquartered in San Bruno, California; not Ireland.

I believe the HQ location has no bearing on the entity you're doing business with. The one in the YT terms & conditions as of now is Google Ireland.

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?

>If you’re not physically present in the US and are not a US citizen, why would you be subject to (income) tax?

https://en.wikipedia.org/wiki/Tax_withholding#International_...

Ha! Very interesting thanks.

California has similar laws. That if the work was done in California even if you live or are currently remote you owe California state income tax on those earnings.

I suppose a non-citizen subject to this tax would have to appeal to their own government and raise the issue diplomatically. But I doubt most nations would be in a position to change the United State's behavior in this regard. Maybe the EU has enough clout to contest this in a court of international law. But that also depends on them wanting to raise the issue in the first place.

EU is very much interested in collecting tax from tech giants.

We may simply impose tax on their global profits after some system of dividing them fairly.

Fair Taxation of the Digital Economy: https://ec.europa.eu/taxation_customs/business/company-tax/f...

Well the US has a lot of tax treaties. But not with all countries.

The EU is literally in the process of putting the same kind of taxes on technology companies. And people are cheering for it. The US does the same in reverse, everyone loses their minds...

I don't think it's the same. Huge corporations already shift their profits around to avoid taxes. This is only going to affect small businesses and independent creators that can't take advantage of the same corporate structure as a huge tech company.

It is a form of income tax, yes. It's on top of sales taxes. And yes this means double taxation..

...like every other country out there that has both income tax and VAT/sales tax?

Double taxation usually means being taxed on the same amount by two foreign governments.

> But why?

How are they able to generate the income? Through the services YouTube provides from the US. How is YouTube able to provide those services? Because the US government creates infrastructure to enable it. How is that infrastructure paid for? Taxes. Hence they tax the income.

Ok, but that doesn’t answer the question at all. If I live in the EU and work for Google I don’t have to pay US income tax.

I’m not arguing for/against btw. Just asking about the technical reason.

If you live in the EU and work for Google, you probably actually work for Google's EU-based subsidiary. There's no US-based company involved in the relationship. It's confusing because the company treats all the subsidiaries as one whole, while the law treats the subsidiaries as their own entities.

AFAIK this misses the point. If a EU citizen is contracted by a US company, but living in the EU they are not subject to US income tax at all, but only to their own state's - and also this might not be legal if the US corp has a EU subsidiary. (If they live in the US they are taxed by the US first and their home country second, but taxes paid in the US are being deducted from the taxes they have to pay in their home country. And, if they are contracted with a EU based subsidiary then they are taxed in the EU only, obviously.)

> If they live in the US they are taxed by the US first and their home country second

That's not universally true. My home country doesn't require any income taxes from me since I neither work nor live there. AFAIK the US is quite unique in that regard that they require their citizens to pay taxes no matter where they are working or living.

> the government creates infrastructure to enable it.

Hearty laugh.

Yes, to a degree, but at the current time (and for a good long time) the US government does not even pretend to try. Tell me a significant infrastructure package since the interstates.

Many relevant infrastructure are created by telecom companies, should we owe taxes to those too?

> Many relevant infrastructure are created by telecom companies, should we owe taxes to those too?

They don’t have tax raising powers so they can’t. The US does so it can.

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.

How is this not exactly the same as the EU putting targeted taxes on major US technology companies to stop money from leaving their market?

These companies have offices and employees in Europe - it's hard to argue that they are not substantially doing business in Europe when they have employees, facilities and customers in Europe.

Compare that to some mid sized retailer located in one country who adds international shipping as an option

"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.

Another thing to add to this is that Europeans get paid by Google Ireland Ltd rather than Google Inc.

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.

This heavily depends on the tax agreement your country has with the US.

yeah I guess you're right, I had improperly universalized my local situation.

Deduct or expense? The later is almost for sure, the former not so sure.

IIRC my reading of stories of US citizens working in other countries and paying taxes in those countries can deduct the money they have paid on the American taxes from the money they have to pay to the local taxes. Which makes sense otherwise nobody would want to leave the US to work in another country, given that other countries often have much higher taxes.

At any rate I would definitely be deducting the American taxes, if I was hit with a situation like this.

I guess though with Google doing it there are all sorts of things that won't be too the creator's benefit - for example if I got 10000 before and spent 2000 on things I could deduct in my home country and now I get 8000 because America takes 2000 I might not take that 2000 deduction in my home country because I need the money for other non-deductable things, whereas taking a deduction on American taxes will probably be more difficult for me than it is for deducting things locally - ugh, I can see how it would make you pissed off.

Glad I don't deal with Google.

Note that the USA will allow you to deduct foreign taxes paid, but California won’t. It’s a good idea not to be a Californians before going abroad to work.

Yes, but I think you have to file taxes as a foreign national with the IRS then. Just the Google receipt won’t be enough for your local taxes. And filling out taxes with the IRS might block you from getting a visitor visa to the US.

> And filling out taxes with the IRS might block you from getting a visitor visa to the US.

No it won’t. Plenty of non resident aliens file taxes with the IRS. You do need to get an ITIN to do it, but you’ll be able to deduct foreign tax paid against USA tax obligations. Not easy, but there are plenty of instructions on how to do it. The state department won’t ding anyone or even ask for filing a tax return with the IRS.

I'd imagine most content creators come from countries that have tax treaties with the US.

Tax treaties are not simple. Doesn't mean you won't get double taxed

It also doesn't mean that most complaints about 2x taxation aren't from people seeking 0x taxation while complaining that they're still stuck with 1x taxation.

Some double taxation treaties only apply to salary/wage income and not self-employed (which YouTube would count as).

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.

This comes down to where Alphabet/Google/YouTube's "Nexus" is. They are a U.S. based company, and therefore the U.S. Government has a stronger claim to taxation.

https://en.wikipedia.org/wiki/State_income_tax#Nexus

Of course. But any country can also ban them (that is the only reason multinational companies obey national laws). We all saw that with Google vs Australia. So US might be able to get away with this, but I still have my doubts.

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.

I'm sitting at my work machine. You have seen an interesting video on ActivityPub and you want to suggest I watch it. In the ActivityPub world, what is the equivalent to the following set of steps?

   1. You send me a Youtube URL
   2. I load that page in my browser (Chrome, Firefox, Safari, Android, iPhone, Desktop, anything)
   3. I watch the video

In my experience, occasionally watching videos its almost the exact same.

   1. You send me a peertube -- any peertube URL
   2. I load that page in my browser (Chrome, Firefox, Safari, Android, iPhone, Desktop, anything)
   3. I watch the video

I'm not sure what the peertube mobile compatibility is like but newpipe supports it and i assume modern mobile browsers work.

And how much did the owner of the video earn from that link?

YouTube is not popular because it's easy for YOU, it's popular because the creator can get money for a video with a few clicks while Google manages ad contracts, bidding and infrastructure to make the money making happen.

PeerTube doesn't give you that.

Many youtubers simply incorporate an advertisement in their video in agreement with some company. Has been working for many years already.

There's a huge jumpgap between "click there to monetize video" and finding + negotiating a sponsorship contract with a partner.

You hid giant amount of work behind that "simply".

To be fair, the tax policies that triggered this discussion wouldn't apply in that case.

Couldn't the creator deploy AdSense or another ad-based video monetization tool on their site? https://support.google.com/adsense/answer/1705822?hl=en Or am I misunderstanding how PeerTube works?

Agreed, but I get the feeling that many people here are fervent believers that adtech doesn't work/shouldn't exist, etc... so they tend to gloss over just how important monetization is.

There is nothing with the distributive power and monetization potential like YouTube.

It's exactly the same? Activitypub just changes the way subscriptions work.

>Is youtube really worth it at this point?

I'm not sure there are many video platforms with as much reach as youtube has.

I'll admit as a user I often ignore video links that aren't youtube because of the kludgy experiences on other video sites...

Doesn't patreon also need to follow the US tax code? Just because they haven't it doesn't mean that they don't have to. Countries taxing content creators from other countries will get crazy.

> Is youtube really worth it at this point?

Since the middle of June 2020 I've been growing my channel, now it has 40k subscribers.

I'm not there yet, but I can easily see a near future where I make more money from YT directly than I ever made as a Software Engineer (NOT FAANG level). So I just film what I love doing (exploring, hiking, tinkering, travel), and that's my career.

I think YT's discovery and reach is - and will be for some time - unparalleled for a lot of types of content?

I haven't "discovered" any new channels from youtube in years. Reddit is better at steering me toward content that I want to consume.

YT discovery only brings you new stuff if you only use it in icogneto mode.

No one else has an active user count close to the same order of magnitude. Not to mention apps for every platform.

Why on earth do you need an app to watch a video in a web page? It doesn't even store anything locally, IIRC the iOS one just displays an astronaught cartoon and a fake apology when there's no connection.

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

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-...

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.

Youtube's video on the topic:

https://www.youtube.com/watch?v=SeKEtf8A3FU

Support page that goes into detail:

https://support.google.com/youtube/thread/101463270?hl=en

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.

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?

US government would never agree to that. It would allow foreign creators to potentially incorporate in other nations in an advantageous manner.

Charging taxes per business entity, means no one can hide from Uncle Sam, and they can tax YouTube itself as well!

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

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.

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

Depends on the tax treaty. With Canada and the US it is for example.

So, the Canadian creator complaining should in theory be able to file a W-8BEN form with youtube showing Canadian beneficial ownership of the channel, and then the tax rate will be 0% due to the US Canada tax treaty. The creator will likely need an ITIN as well.

Not a lawyer. Just have done this for royalties via amazon’s printing company. Amazon otherwise would have had to withhold 15% of the income.

I read the title as YouTube not wanting to have to process W-8BEN forms for the creators.

But their support article[1] says that if you submit your "tax info" (presumably w-8ben?), they'll adjust the withholding rate accordingly.

[1] https://support.google.com/youtube/thread/101463270?hl=en

Yeah more than likely Youtube just had poor comma. Amazon had an extremely seamless tax interview that guided you through the needed forms.

They even had a prefilled W 8BEN, and I think they pointed to the relevant parts of the tax treaty for me.

Believe they scaled this back as non publishers were abusing it to get ITINs in order to get US credit cards. Too seamless if anything.

*poor comms

Why would they need an ITIN? They are not filing US taxes.

It would appear the process has changed since I did it. If you live in a country with a national tax id number, you can now use that. However, you can also elect to use an ITIN or EIN even though no US tax return is required.

“ If you are a non-U.S. publisher interested in claiming tax treaty benefits to reduce your withholding, you will have to provide a tax identification number (TIN). If you have a U.S. TIN (ITIN for individuals, EIN for non-individuals), you must provide it. If you do not have a U.S. TIN and the tax authority in your country of residence issues an income tax identification number, you may enter it to claim treaty benefits.”

https://www.savvynewcanadians.com/amazon-kindle-self-publish...

Will the tax money be used for war?

Yes.

There will be youtubers forced to pay income tax to the US government only for it to be used for war against them.

Tax money is not bound to specific things, but goes into the budget. From that budget the DOD and military are financed. As are all other activities by the U.S. government.

> American tax

Short answer, yes.

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

Yes, but then their editorializing about "beleaguered" this and "overwhelmingly" that would lack the cachet of coming from something that looks like a news organization.

https://www.theguardian.com/commentisfree/2019/jul/26/russia...

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.

How is that screwed up? Unemployment income is still income. It works the same way in canada as well[1]. I get why it sounds stupid on the surface (ie. why is the government giving you money, then asking to give a portion back?), but it makes sense if you think about it. Otherwise unemployment disproportionately benefits high income earners because it's tax-free.

[1] https://www.canada.ca/en/revenue-agency/news/2021/02/governm...

We should not expect people to devote lots of energy towards frivolous bureaucratic errands. If everyone who collected unemployment correctly identified the tax implications and budgeted appropriately then we would have a very screwed up problem on our hands: a drone-like population of box-checkers who shockingly ignore more important aspects of life.

>If everyone who collected unemployment correctly identified the tax implications and budgeted appropriately then we would have a very screwed up problem on our hands: a drone-like population of box-checkers who shockingly ignore more important aspects of life.

I think you're being hyperbolic here. If you knew about this it takes less than 5 minutes for you to get out a calculator and figure out how much you need to have on reserve. If you didn't know about this add in 10-15 minutes to research it. That doesn't seem like very onerous to me. Some sibling commenters also mentioned that some state's unemployment application contain a checkbox asking whether they want their income tax to be withheld for them, which reduces the time spent to 5 seconds.

Yup, I intentionally made my comment a little hyperbolic, but I really want to drive attention to the "everyone" portion of my comment. The errand everyone must correctly perform punishes the most at-risk for failure. If everyone complied perfectly, then the IRS would not ding anyone, but also the population would likely resemble a sad army of soulless drones.

Instead thousands upon thousands of bureaucratic errands end up stacked on sticky kitchen tables next to crying children and loud-talking relatives. Life has way more to offer than pithy remarks from suits about box checking especially when the penalties the suits hand out deal such crushing blows to the people at the kitchen table.

It's screwed up because we give people a very small amount of income to help them while they are seeking another job and then tax them on that small income. Why does it need to be taxed?

The max unemployment given per month does not cover rent for most people in a mid to high cost of living area. It just seems insane to decide that that income should be taxed as well.

I think people think its messed up because most people are using the very little money they are given just to not be evicted or buy food. No one is saving it. So the idea that people will be able to cover it in taxes is... well honestly laughable.

Well I guess the alternative would be to withhold part of the stimulus/unemployment checks. That would result in less surprises come tax time, but it also means less money paid out (the amount withheld is basically a interest-free loan from the government).

Or just not tax unemployment...

The fact that it is surprising to many people is a problem, whether or not it makes sense to you or makes sense in the abstract.

That is probably a strong term. What term best applies to money that has been taxed multiple times?

How are you getting taxed multiple times? I'm not sure how it applies to unemployment income.

That money comes from tax revenue. You already paid taxes on your income once. Now you are getting taxed on it again when it recycles back to you. You will also get taxed on it again when you spend it. There is a flow chart somewhere that shows the myriad of ways the same money is repeatedly taxed.

>That money comes from tax revenue.

Technically it comes from unemployment insurance premiums. Wikipedia says: In the United States, benefits are funded by a compulsory governmental insurance system, not taxes on individual citizens.

It's easy to imagine some sort of alternate reality where the unemployment insurance system is handled by a private company, for instance.

Moreover, calling it double-tax doesn't really make any sense because the tax is on the income, not the dollar itself. Public sector employees aren't getting double-taxed because part of their salary goes to the government, which pays for their paycheck. You're also not taxed infinity-taxed because your paycheck comes from a business which is taxed, which gets its revenue from a consumer which is taxed, which gets their paycheck from a business which is taxed...

If it isn't a tax, then may I opt out of it and/or get all the money back I put into it? My current strategy is government grants to fund project I want to do regardless, but I don't think that will ever really break even.

Yes, this is exactly what it means to have income and consumption taxes. If you buy an ice cream for $1, that is $1 of consumption and $1 of income.

When you fill out the certification for unemployment, there is a question that states exactly that: would like us to hold the tax or will you pay it later?

I helped someone go through the process. It definitely does for California.

Unemployment income is taxed as regular income in every jurisdiction I am aware of. Not sure where this outrage is coming from. And as the previous reply explains, it makes sense as to why that happens.

As an update on this... The latest stimulus package included 10K+ of unemployment income tax forgiveness. I'm glad the folks in DC realized how many people were going to end up with very expensive tax bills this year.

> Nothing like getting a stimulus check and then giving it all to the IRS plus some.

In what situation is the income tax over 100%

The taxes on unemployment income can easily exceed the stimulus amount, because they're two different things. I don't think the stimulus checks themselves are taxed, but I'm not an American and I don't know for sure.

Stimulus checks are a refundable tax credit, ie a tax refund. They cannot be taxed, but in some cases they can be seized by the IRS.

That's moving the goalposts. The OP makes it sound like given an income "X", adding the stimulus to that will cause the IRS to not only take all the stimulus, but also some of X.

My question is, under what circumstance would getting a gov't stimulus payment actually net you less money than not, all else being equal.

I meant anyone who got roughly 7.5K in unemployment or more and did not choose to get taxes taken out of it will likely end up owing whatever stimulus check they may receive and then some.

That's not how I read it.

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