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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.

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.

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.

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.

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

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.

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.

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.

>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.

> 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.

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.

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.

No

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.

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.

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

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"

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.

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

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.

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?

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

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?

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

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

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.

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

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”.