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Comment by sudosysgen | Hacker News Reader

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.

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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.

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.

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.

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.

>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.

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