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YouTube tells foreign creators they will soon be charged American tax

133 points by irockzz 6y ago

foolzcrow 6y ago
Getting rich while avoiding paying any taxes. Unethical and criminal.
notwhereyouare 6y ago
some prior discussion here, not much though https://news.ycombinator.com/item?id=26402707 https://news.ycombinator.com/item?id=26402707
bryanrasmussen 6y ago
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.
- johannes1234321 6y ago
  This heavily depends on the tax agreement your country has with the US.
  - bryanrasmussen 6y ago
    yeah I guess you're right, I had improperly universalized my local situation.
- hartator 6y ago
  Deduct or expense? The later is almost for sure, the former not so sure.
  - gruez 6y ago
    I'd imagine most content creators come from countries that have tax treaties with the US.
    - space_rock 6y ago
      Tax treaties are not simple. Doesn't mean you won't get double taxed
      - jjoonathan 6y ago
        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.
    - intellirogue 6y ago
      Some double taxation treaties only apply to salary/wage income and not self-employed (which YouTube would count as).
  - bryanrasmussen 6y ago
    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.
    - 6y ago
corobo 6y ago
Does rt.com know they can just create a collection of tweets inside Twitter?
- totalZero 6y ago
  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-disinformation-rt-nuanced-online-ofcom-fine https://www.theguardian.com/commentisfree/2019/jul/26/russia...
swiley 6y ago
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.
- jerrre 6y ago
  I think YT's discovery and reach is - and will be for some time - unparalleled for a lot of types of content?
  - seastonATccs 6y ago
    I haven't "discovered" any new channels from youtube in years. Reddit is better at steering me toward content that I want to consume.
  - swiley 6y ago
    YT discovery only brings you new stuff if you only use it in icogneto mode.
- duxup 6y ago
  >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...
- rkangel 6y ago
  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
  - deleted 6y ago
    [deleted]
  - mouldysammich 6y ago
williesleg 6y ago
It's all about the tax. Steal from the workers and give it away to get elected.
brainzap 6y ago
Will the tax money be used for war?
- ragebol 6y ago
  > American tax
- brobdingnagians 6y ago
  Short answer, yes.
- johannes1234321 6y ago
  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.
- sudosysgen 6y ago
  Yes. There will be youtubers forced to pay income tax to the US government only for it to be used for war against them.
ricardobayes 6y ago
Is royalties a different category for US taxation than other revenue streams?
- graeme 6y ago
  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.
  - ricardobayes 6y ago
    Why would they need an ITIN? They are not filing US taxes.
    - graeme 6y ago
      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-publishing-how-to-avoid-the-30-u-s-withholding-tax/ https://www.savvynewcanadians.com/amazon-kindle-self-publish...
  - rjsw 6y ago
    I read the title as YouTube not wanting to have to process W-8BEN forms for the creators.
mrweasel 6y ago
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.
- chrisseaton 6y ago
  > 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'?
  - tinyhouse 6y ago
    I think they meant that Spain can now demand Youtubers to pay tax for money they made from Spanish viewers on Youtube. Etc.
    - chrisseaton 6y ago
      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?
      - tinyhouse 6y ago
        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.
        totalZero 6y ago
        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.
duxup 6y ago
Youtube's video on the topic: https://www.youtube.com/watch?v=SeKEtf8A3FU https://www.youtube.com/watch?v=SeKEtf8A3FU Support page that goes into detail: https://support.google.com/youtube/thread/101463270?hl=en https://support.google.com/youtube/thread/101463270?hl=en
Macha 6y ago
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.
- jgowdy 6y ago
  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?
  - Macha 6y ago
    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
wastedhours 6y ago
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.
the_svd_doctor 6y ago
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?
- gruez 6y ago
  >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_withholding https://en.wikipedia.org/wiki/Tax_withholding#International_...
  - the_svd_doctor 6y ago
    Ha! Very interesting thanks.
    - bushbaba 6y ago
      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.
- chrisseaton 6y ago
  > 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.
  - the_svd_doctor 6y ago
    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.
    - 6y ago
tinyhouse 6y ago
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?
- bilbo0s 6y ago
  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!
Taylor_OD 6y ago
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.
- gruez 6y ago
  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/government-of-canada-announces-targeted-interest-relief-on-2020-income-tax-debt-for-low--and-middle-income-canadians.html https://www.canada.ca/en/revenue-agency/news/2021/02/governm...
  - LinuxBender 6y ago
    That is probably a strong term. What term best applies to money that has been taxed multiple times?
    - gruez 6y ago
      How are you getting taxed multiple times? I'm not sure how it applies to unemployment income.
      - LinuxBender 6y ago
        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.
zelon88 6y ago
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.
tristanj 6y ago
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 https://support.google.com/youtube/thread/101463270 dispels these claims. This article should be replaced by the original source.
- sandworm101 6y ago
  "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.
ssijak 6y ago
What was different until now? Payments to creators from youtube were not considered royalties so they were not taxable or?
zests 6y ago
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.
ketzu 6y ago
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 http://www.kongregate.com/de/pages/international-tax-faq [2] https://www.irs.gov/individuals/international-taxpayers/tax-treaties https://www.irs.gov/individuals/international-taxpayers/tax-...
nromiun 6y ago
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.
- Qub3d 6y ago
  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 https://en.wikipedia.org/wiki/State_income_tax#Nexus
  - nromiun 6y ago
    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.
DINKDINK 6y ago
"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.
- Aerroon 6y ago
  Another thing to add to this is that Europeans get paid by Google Ireland Ltd rather than Google Inc.

133 points by irockzz 6y ago

Getting rich while avoiding paying any taxes. Unethical and criminal.

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

bryanrasmussen 6y ago

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.

johannes1234321 6y ago
This heavily depends on the tax agreement your country has with the US.
- bryanrasmussen 6y ago
  yeah I guess you're right, I had improperly universalized my local situation.
hartator 6y ago
Deduct or expense? The later is almost for sure, the former not so sure.
- gruez 6y ago
  I'd imagine most content creators come from countries that have tax treaties with the US.
  - space_rock 6y ago
    Tax treaties are not simple. Doesn't mean you won't get double taxed
    - jjoonathan 6y ago
      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.
  - intellirogue 6y ago
    Some double taxation treaties only apply to salary/wage income and not self-employed (which YouTube would count as).
- bryanrasmussen 6y ago
  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.
  - 6y ago

corobo 6y ago

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

totalZero 6y ago
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-disinformation-rt-nuanced-online-ofcom-fine https://www.theguardian.com/commentisfree/2019/jul/26/russia...

swiley 6y ago

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.

jerrre 6y ago
I think YT's discovery and reach is - and will be for some time - unparalleled for a lot of types of content?
- seastonATccs 6y ago
  I haven't "discovered" any new channels from youtube in years. Reddit is better at steering me toward content that I want to consume.
- swiley 6y ago
  YT discovery only brings you new stuff if you only use it in icogneto mode.
duxup 6y ago
>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...
rkangel 6y ago
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
- deleted 6y ago
  [deleted]
- mouldysammich 6y ago

williesleg 6y ago

It's all about the tax. Steal from the workers and give it away to get elected.

brainzap 6y ago

Will the tax money be used for war?

ragebol 6y ago
> American tax
brobdingnagians 6y ago
Short answer, yes.
johannes1234321 6y ago
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.
sudosysgen 6y ago
Yes. There will be youtubers forced to pay income tax to the US government only for it to be used for war against them.

ricardobayes 6y ago

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

graeme 6y ago
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.
- ricardobayes 6y ago
  Why would they need an ITIN? They are not filing US taxes.
  - graeme 6y ago
    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-publishing-how-to-avoid-the-30-u-s-withholding-tax/ https://www.savvynewcanadians.com/amazon-kindle-self-publish...
- rjsw 6y ago
  I read the title as YouTube not wanting to have to process W-8BEN forms for the creators.

mrweasel 6y ago

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.

chrisseaton 6y ago
> 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'?
- tinyhouse 6y ago
  I think they meant that Spain can now demand Youtubers to pay tax for money they made from Spanish viewers on Youtube. Etc.
  - chrisseaton 6y ago
    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?
    - tinyhouse 6y ago
      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.
      - totalZero 6y ago
        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.

duxup 6y ago

Youtube's video on the topic: https://www.youtube.com/watch?v=SeKEtf8A3FU https://www.youtube.com/watch?v=SeKEtf8A3FU Support page that goes into detail: https://support.google.com/youtube/thread/101463270?hl=en https://support.google.com/youtube/thread/101463270?hl=en

Macha 6y ago

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.

jgowdy 6y ago
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?
- Macha 6y ago
  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

wastedhours 6y ago

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.

the_svd_doctor 6y ago

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?

gruez 6y ago
>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_withholding https://en.wikipedia.org/wiki/Tax_withholding#International_...
- the_svd_doctor 6y ago
  Ha! Very interesting thanks.
  - bushbaba 6y ago
    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.
chrisseaton 6y ago
> 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.
- the_svd_doctor 6y ago
  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.
  - 6y ago

tinyhouse 6y ago

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?

bilbo0s 6y ago
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!

Taylor_OD 6y ago

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.

gruez 6y ago
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/government-of-canada-announces-targeted-interest-relief-on-2020-income-tax-debt-for-low--and-middle-income-canadians.html https://www.canada.ca/en/revenue-agency/news/2021/02/governm...
- LinuxBender 6y ago
  That is probably a strong term. What term best applies to money that has been taxed multiple times?
  - gruez 6y ago
    How are you getting taxed multiple times? I'm not sure how it applies to unemployment income.
    - LinuxBender 6y ago
      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.

zelon88 6y ago

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.

tristanj 6y ago

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 https://support.google.com/youtube/thread/101463270 dispels these claims. This article should be replaced by the original source.

sandworm101 6y ago
"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.

ssijak 6y ago

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

zests 6y ago

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.

ketzu 6y ago

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 http://www.kongregate.com/de/pages/international-tax-faq [2] https://www.irs.gov/individuals/international-taxpayers/tax-treaties https://www.irs.gov/individuals/international-taxpayers/tax-...

nromiun 6y ago

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.

Qub3d 6y ago
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 https://en.wikipedia.org/wiki/State_income_tax#Nexus
- nromiun 6y ago
  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.

DINKDINK 6y ago

"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.

Aerroon 6y ago
Another thing to add to this is that Europeans get paid by Google Ireland Ltd rather than Google Inc.