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YouTube tells foreign creators they will soon be charged American tax

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Re: YouTube tells foreign creators they will soon be charged American tax

#21

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.

Re: YouTube tells foreign creators they will soon be charged American tax

#22

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 video…

> 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'?

Re: YouTube tells foreign creators they will soon be charged American tax

#24
post #17
post #7

Earlier quoted context omitted.

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

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

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

Re: YouTube tells foreign creators they will soon be charged American tax

#25
post #6

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

Re: YouTube tells foreign creators they will soon be charged American tax

#26
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.

Re: YouTube tells foreign creators they will soon be charged American tax

#27
post #7

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 creatin…

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.

Re: YouTube tells foreign creators they will soon be charged American tax

#28
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.

Re: YouTube tells foreign creators they will soon be charged American tax

#29
post #21

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 ot…

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

Re: YouTube tells foreign creators they will soon be charged American tax

#30
post #25
post #6

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

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