Home Business YouTube to remit 24pc tax to US from content creators starting June

YouTube to remit 24pc tax to US from content creators starting June


Technology

YouTube to remit 24pc tax to US from content creators starting June


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YouTube will deduct up to 24 per cent tax for content creators outside the United States. FILE PHOTO | AFP

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Summary

  • Google said all creators outside the US will be deducted taxes on their AdSense earnings.

Kenyan digital content creators with YouTube channels will start paying taxes to the United States government starting June this year.

In a statement sent to all YouTube content generators, parent firm Google said all creators outside the US will be deducted taxes on their AdSense earnings.

This will affect revenue earned from US viewers through advertisement views, Super Chat, YouTube Premium, Channel Memberships and Super Stickers.

“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 per cent of your total earnings worldwide,” said the tech giant.

AdSense is a service operated by Google that enables content creators to monetise whatever they post on the platform. A percentage of the ad revenue on YouTube goes to owners of the content.

US audience

The tech firm said the taxes will only be deducted on revenue generated from content targeting US viewers. 

“Google has a responsibility under Chapter 3 of the US Internal Revenue Code to collect tax info from all monetising creators outside of the US and deduct taxes in certain instances when they earn income from viewers in the US,” it said.

The popularity of the online video-sharing platform has seen personalities and media outlets run accounts as they try to reach young viewers seeking content ranging from music, food, travel, beauty, comedy to religious teachings.

According to the California-based company, YouTube receives over two billion subscribers each month. The users watch over one billion hours of videos which translates to billions of views for content creators.

The popularity of content on the platform is based on the views it attracts.

Google said in their update that the company was in the process of updating the terms of service where earnings from YouTube will be considered royalties from a US tax perspective.

This move comes at a time the Kenya Revenue Authority (KRA) has stepped up efforts to tax businesses operating in Kenya’s cyberspace.

The Income Tax (Digital Service Tax), 2020 came into effect in January. KRA is eyeing businesses and persons selling services and goods online as it tries to bring more taxpayers into its net.



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