US Tax Guide for International Creators & YouTubers: Earnings & Withholding

Introduction

For international creators and YouTubers, understanding the important tax requirements related to your earnings is crucial, particularly as platforms are now required to withhold taxes on income generated from viewers in the United States. This policy, a responsibility under Chapter 3 of the U.S. Internal Revenue Code, directly affects the YouTube earnings of every monetising creator located outside of the U.S.

This guide provides essential information for the content creator on managing these tax obligations, from submitting the correct tax information to potentially reducing the amount of tax withheld. Moreover, it underscores the importance of consulting an international estate planning lawyer to properly manage cross-border income streams and ensure long-term financial compliance and protection.

Understanding US Sourced Income for the International Creator

Why YouTube Must Deduct Taxes from Non-US Creators

Platforms like YouTube, as US-based companies, are considered withholding agents under Chapter 3 of the U.S. Internal Revenue Code. They have a responsibility to collect tax information from every monetising creator, including those outside the United States.

These companies are legally required to deduct taxes on earnings generated from viewers within the US, since this income is considered “US source.” The tax requirements apply to all of a creator’s YouTube earnings from US viewers, including:

Earning Source	Description
Ad views	Income generated from advertisements.
YouTube Premium	Revenue from YouTube Premium subscriptions.
Super Chat	Payments from viewers during live streams.
Super Stickers	Payments for animated images in live chat.
Channel Memberships	Recurring payments for member-only perks.

This process ensures compliance with US tax law. Withholding agents must report both the tax information and the withheld amounts to the Internal Revenue Service (IRS).

The Difference Between 30% Withholding & the 24% Default Rate

The standard tax withholding rate for non-US residents on US-sourced income is a flat 30%. However, this rate can often be reduced if the international creator’s country of residence has a tax treaty with the United States.

There is a significant risk for any YouTube creator who fails to provide their tax information. If the required forms are not submitted by the deadline, Google may be required to apply a default withholding rate of up to 24% on the creator’s total earnings worldwide, not just their US-sourced income.

Submitting the correct tax information is crucial. Doing so ensures that taxes are only withheld on earnings from the US and at the proper, potentially lower, treaty rate.

How the International Creator Can Use Form W-8BEN to Claim Treaty Benefits

Submitting Tax Information to Google AdSense

All monetising creators on YouTube, regardless of their global location, are required to submit their U.S. tax information to Google. This process is essential for determining the correct amount of tax to deduct from a creator’s earnings generated from viewers in the U.S. By completing the appropriate form, such as Form W-8BEN for non-U.S. individuals, you officially declare your non-resident status.

To submit your U.S. tax information to Google, follow these steps in your AdSense account:

• Sign in to your AdSense account and navigate to the Payments info section.
• Click on Manage settings and scroll to the “Payments profile” area.
• Select the edit icon next to “United States tax info” and then click Manage tax info.
• The system will then guide you in selecting the correct tax form for your situation, which is typically Form W-8BEN for an international creator who is an individual, or Form W-8BEN-E for an entity.

It is important for every YouTube creator to complete this step promptly. If a content creator fails to provide this tax information, Google may be required to withhold up to 24% of their total earnings worldwide, not just from U.S.-sourced income.

Additionally, tax forms generally remain valid for three years, after which you will need to resubmit them.

The Role of Taxpayer Identification Numbers or TINs

A Taxpayer Identification Number (TIN) is a processing number required by the U.S. IRS for all U.S. tax forms. For international creators, providing a TIN is a critical step to validly claim the benefits of a tax treaty between your country of residence and the United States.

Without a valid TIN, you cannot receive a reduced rate of tax withholding. When completing your tax forms in AdSense, you must provide either a Foreign TIN or a U.S. TIN. A Foreign TIN is the tax identification number issued to you by your local tax authority.

Examples of acceptable Foreign TINs include:

Country	Acceptable Foreign TIN
India	Permanent Account Number (PAN)
United Kingdom	Unique Taxpayer Reference (UTR) or National Insurance Number (NINO)
Japan	Individual Number (also known as “My Number”)
Russia	Taxpayer Personal Identification Number (INN)

Ensuring you have and provide the correct TIN is essential for reducing your tax withholding rate and complying with U.S. tax requirements for your YouTube earnings.

If you are unsure what your local TIN is, you should consult your local tax authority or a tax professional.

Treaty Withholding Rates & Income Types for Your Earnings

Distinguishing Between Royalties & Services Income

Payments that an international creator receives from Google products can be classified into multiple categories for tax purposes. It is important for YouTubers to understand these distinctions to ensure the correct tax withholding rates are applied to their earnings.

When you submit your tax information, you will need to identify which income types you are eligible to claim treaty benefits for. To help you decide which payment types relate to your partnership with Google, you can use the following as a guide:

Income Classification	Typically Applies To
Other Copyright Royalties	Earnings from the YouTube Partner Program.
Services	Income generated from platforms like Google AdSense.

By selecting all income types for which you are eligible to claim treaty benefits, you ensure that Google withholds tax at the appropriate rate based on the specific kind of income being paid.

Examples of Treaty Rates for Countries

The tax withholding rate applied to your YouTube earnings heavily depends on whether your country of residence has a tax treaty with the United States. These treaties can significantly reduce the amount of tax that is deducted from your payments.

Submitting your tax information correctly allows these treaty benefits to be applied automatically. The benefits vary from one country to another, highlighting the importance of claiming them. For example:

Country	Example Withholding Rate on Royalties
United Kingdom	0%
Korea	10%
India	15%

The Process for Filing Form 1040-NR to Reclaim Over-Withheld Taxes

When You Must File a US Nonresident Alien Income Tax Return

An international creator may need to file a U.S. Nonresident Alien Income Tax Return, known as Form 1040-NR, to manage their tax requirements. Filing becomes necessary if you were engaged in a trade or business in the United States during the tax year.

You must also file if your U.S. income tax liability was not fully covered by the amount of tax withheld at the source. In addition, filing Form 1040-NR is the primary method for a YouTube creator to:

• Claim a refund for any overpaid or over-withheld tax
• Claim the benefit of any allowable deductions or credits against your U.S.-sourced earnings

For most non-resident creators who are not employees and do not have an office in the U.S., the deadline to file this return is generally June 15 of the following year.

Deducting Business Expenses to Offset Withheld Amounts

By filing a tax return, a content creator can potentially treat their YouTube earnings as “income effectively connected with a trade or business in the United States.” This classification allows you to deduct legitimate business expenses from your gross income, which can significantly lower your overall taxable income.

The tax that was already withheld from your earnings is then treated as a pre-paid tax credit. If the final tax calculated on your net income (after deductions) is less than the amount that was withheld, you may be entitled to a refund from the IRS.

Legitimate business expenses that YouTubers can often deduct include:

• Equipment, such as cameras, microphones, and computers used for creating content
• Software and licenses necessary for video editing and production
• A portion of internet and electricity costs related to your business activities
• Marketing and advertising costs to promote your channel
• Travel expenses for events or shoots directly related to your content creation

Obtaining an ITIN for Tax Filing Purposes

To file a U.S. Nonresident Alien Income Tax Return, you will need a U.S. tax identification number. Since international creators are not eligible for a Social Security Number (SSN), you must apply for an Individual Taxpayer Identification Number (ITIN), which is required by the IRS for all non-residents who need to file a U.S. tax return.

The application for an ITIN can typically be submitted along with your first Form 1040-NR. This process requires you to provide certified copies of identity documents, such as your passport.

Given the complexities of international tax compliance and filing, it is highly recommended to consult an international estate planning lawyer who can ensure you meet all tax requirements and correctly claim any refunds you are owed.

The Importance of Hiring an International Estate Planning Lawyer

The Complexity of Cross-Border Income Streams & Assets

For international creators, managing earnings from multiple jurisdictions introduces significant tax complexities. Your tax obligations are primarily determined by your country of residence, not by the location of the platform or brand that pays you.

This means that income from a U.S.-based company is often subject to tax rules in both the United States and your home country. As a result, this dual system creates a risk of double taxation, where the same earnings are taxed twice.

Many countries have tax treaties with the U.S. designed to prevent double taxation. However, correctly claiming these benefits requires careful documentation. Without a proper legal structure, YouTubers can find it difficult to manage these overlapping tax requirements and protect their cross-border assets effectively.

Protecting Digital Wealth & Ensuring Compliance

Given the intricate nature of international tax law, seeking professional guidance is crucial for any content creator with global earnings. An accountant or tax lawyer specialising in international taxes can ensure you remain compliant with all relevant tax requirements, helping you avoid costly penalties and mistakes.

Professional advice is essential for protecting your digital wealth and securing your financial future. An expert can help you:

• Navigate the complexities of tax treaties to reduce or eliminate double taxation.
• Maximise your allowable deductions by identifying legitimate business expenses.
• Ensure all necessary forms, such as the Form W-8BEN, are filed correctly to apply the proper tax withholding rates to your YouTube earnings.

Conclusion

For international creators and YouTubers, understanding U.S. tax requirements is essential to protect your earnings from excessive withholding. Submitting the correct tax information allows you to claim treaty benefits that can significantly lower the tax platforms are required to deduct from your U.S.-sourced income.

Properly managing these cross-border tax obligations can be complex, and professional guidance is key to ensuring compliance and protecting your digital wealth. To secure your financial future, contact the international estate planning lawyers at PBL Law Group today to discuss how our specialised services can help you manage your important tax responsibilities.

Frequently Asked Questions