YouTube to charge tax on creative content from non-US creatives

YouTube to charge tax on creative content from non-US creatives

By Antony Mutunga

Working online is the normal now. Since COVID hit, sweeping thousands of jobs with it, many have looked to online platforms to earn their livelihoods. Specifically, the number of creatives using platforms such as Facebook, Instagram or YouTube to publish their work and material and work has risen exponentially over the past year.

Recently, Google, YouTube’s parent company, announced plans to start deducting taxes for creators outside of the US starting June this year. The move, Google explained, arises from its responsibility under Chapter 3 of the US Internal Revenue Code which requires it to collect tax info from all monetising creators outside of the US and deduct part of that revenue when it earns income from viewers in the US.

In a statement, Google assured its clients outside the US that the taxes, which are to be deducted from a client’s AdSense earning, will only be deducted on revenue generated from content targeting US viewers.

AdSense is a service operated by Google that enables content creators to monetise whatever they post on the platform. The creators earn a percentage of the ad revenue. In its issued statement, the tech giant said: “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 31, 2021, Google may be required to deduct up to 24% of your total earnings worldwide.”

This is expected to affect revenue earned from US viewers through advertisement views, Super Chat, YouTube Premium, Channel Memberships and Super Stickers. YouTube gets over 2 billion logged-in user visits, and every day people watch over a billion hours of video, generating billions of views. More than 70 percent of YouTube watch time comes from mobile devices. The move comes at a time that the Kenya Revenue Authority (KRA) has introduced the Income Tax (Digital Service Tax), 2020, which came into effect in January. The tax which aims at increasing government revenue, targets businesses and persons selling services and goods online.

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