Google has announced through its platform YouTube, that henceforth, it will deduct taxes on the earnings generated by content creators from viewers in the US who watch their videos. The new policy which will take effect as early as June 2021 was communicated via email to every creator making money on YouTube.
In the email sent, the tech giant said YouTubers will be required to submit their tax info in AdSense to determine the correct amount of taxes to be deducted. That is if any apply. The deadline for submitting this information is May 31, 2021. YouTube will be required to deduct up to 24% of your total earnings if anyone defaults. This is bad news for content creators on YouTube as well as talented video producers in the world, including Nigeria.
Google has a responsibility under Chapter 3 of the U.S. Internal Revenue Code to collect tax info, withhold taxes, and report to the Internal Revenue Service (the U.S. tax authority, also known as the IRS) when a YPP creator on YouTube earns royalty revenue from viewers in the U.S. That means that only income earned will be affected, but only that earned from viewers within the United States.
The amount of tax to be deducted from the earning of these content creators will depend on a number of factors. The tax rate is expected to be up to 24 per cent of total earnings worldwide if a creator does not submit his tax info. If the creator submits tax info and claims a treaty benefit, then the final tax deduction is $15.
This change applies to all creators outside of the US, including the ones in Nigeria. However, there won’t be any similar tax deduction for creators living in the US.
