| 13 Apr 2024
Google drops 'bad news' for YouTubers in India and other regions

MUMBAI: Google just made an announcement that can make YouTubers a bit poorer in India and other regions. The search giant in an email to all YouTubers informed that it will be “required to deduct U.S. taxes from payments to creators outside of the US”. American YouTubers will not have to take on additional tax burden. This additional tax for YouTubers outside the US may start getting deducted as early as June 2021.

“Over the next few weeks, we’ll be asking you to submit your tax info in AdSense to determine the correct amount of taxes to deduct, if any apply. If your tax info isn’t provided by May 31st, 2021, Google may be required to deduct up to 24% of your total earnings worldwide,” said Google in an official communication.

What is important to understand is that the tax will be deducted from the earnings from viewers in the US through ad views, YouTube Premium, Super Chat, Super Stickers, and Channel Memberships. You won't have to pay tax for the money you make from viewers outside the US if you provide relevant tax documents. However, if you decide to ignore this communication from Google and don't submit relevant tax info, you may have to pay a massive 24% tax on your entire monthly earnings from YouTube.

New tax rules for YouTubers outside the US

How much can Indian content creators expect to pay extra in taxes ?

Google with an example explained that if a content creator in India makes $1000 a month from YouTube and out of the $1000 income if viewers in US account for $100 earnings then there are these possibilities:

-Creator doesn’t submit tax info: Final deduction is $240 (24% of $1000 monthly earnings). This is because the withholding tax rate if you don’t submit a form is up to 24% of total earnings. This means that until Google has got your completed tax info, it will need to deduct up to 24% of the total earnings worldwide - not just your US earnings.

-Creator submits tax info and claims a treaty benefit: Final tax deduction is $15 (15% of $100 monthly earnings from viewers in US). This is because India and the US have a tax treaty relationship that reduces the tax rate to 15% of earnings from viewers in the US.

-Creator submits tax info, but is not eligible for a tax treaty: Final tax deduction is $30 (30% of the $100 earnings from viewers in US). This is because the tax rate without a tax treaty is 30% of earnings from viewers in the US.

If you are making money from YouTube, it is advisable that you visit Google’s support page for relevant tax information and documentation. The deadline to submit the same is May 31, 2021.

“If tax forms aren’t provided, your tax rate will default to 24% of your total earnings for individual account types (this the account type for a majority of creators) even if you only have a small percentage of revenue from U.S. viewers,” warned Google.