I’m sure you have received the following email (or notification in AdSense or in YouTube Account): The email is as under:
Upcoming tax changes to your YouTube earnings
“We’re reaching out because Google will be required to deduct U.S. taxes from payments to creators outside of the U.S. later this year (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 31, 2021, Google may be required to deduct up to 24% of your total earnings worldwide.
What do I need to do?
In the next few weeks, you will receive an email to submit your tax information in AdSense. The online tax tool in AdSense is six steps and will ask you a series of questions to guide you through the process to determine if any U.S. taxes apply. For more information on these changes and a list of tax info to prepare, visit our Help Center.
Why is this happening?
Google has a responsibility under Chapter 3 of the U.S. Internal Revenue Code to collect tax info from all monetizing creators outside of the U.S. and deduct taxes in certain instances when they earn income from viewers in the U.S.
For creators outside of the U.S., we will soon be updating our Terms of Service where your earnings from YouTube will be considered royalties from a U.S. tax perspective. This may impact the way your earnings are taxed, and as required by U.S. law, Google will deduct taxes.
How will my earnings be impacted?
If you provide your tax info, U.S. taxes may only be applied to your monthly U.S. earnings from AdSense (revenue earned from viewers in the U.S. through ad views, YouTube Premium, Super Chat, Super Stickers, and Channel Memberships). If no tax info is provided, your tax rate may default to the higher individual backup withholding rate (24% of total earnings worldwide). To estimate the potential impact on your earnings follow these instructions.
Thanks, The YouTube Team
All YouTube Creators or Youtubers who live Outside US – United States & earn Revenue or earnings from their YouTube channels, Compulsory Mandatory need to File & Submit Correct Tax Details & Documents Like TIN or Foreign TIN FTIN, If you don’t have FTIN you can submit your Indian PAN Card for Proof that your Country (in case of Pakistan your CNIC is your FTIN) has Tax Treaty with US Government If you fail to do so by 31 May 2021, then Google may begin withholding U.S. taxes on earnings you generate from viewers in the U.S. as early as June 2021.
Please submit your U.S. tax info in AdSense as soon as possible.
You have received this notification in your Google AdSense Account:
Important: Check if additional tax information is required from you. All YouTube creators and partners are required to submit tax information to ensure any applicable taxes on your payments are accurate.
U.S. tax requirements for YouTube earnings
Google is required to collect tax info from creators in the YouTube Partner Program (YPP). If any tax deductions apply, Google will withhold taxes on YouTube earnings from viewers in the U.S. from ad views, YouTube Premium, Super Chat, Super Stickers, and Channel Memberships.
Why Google withholds U.S. taxes
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. If you have earnings from viewers in the U.S., Google may begin deducting taxes (known as withholding) as early as June 2021.
Note: YouTube and Google can’t provide advice on tax issues. Consult a tax professional to better understand your tax situation.
Where U.S. tax requirements apply
Every YPP creator, regardless of their location in the world, is required to provide U.S. tax info to Google. Under U.S. tax law, Google is required to deduct taxes from your YouTube earnings from U.S. viewers, if applicable. The tax withholding requirements can differ depending on your country of residence, whether you’re eligible to claim tax treaty benefits, and whether you identify as an Individual or a Business.
- Creators outside of the U.S: If you submit U.S. tax info, withholding rates are between 0-30% on earnings you generate from viewers in the U.S. and depend on whether your country has a tax treaty relationship with the United States.
- U.S. creators: Google will not withhold taxes on earnings if you have provided valid tax info. Most U.S. creators already have submitted their U.S. tax info.
Important: If no U.S. tax info is provided, Google may be required to withhold using the maximum tax rate. Your tax rate will depend on your AdSense account type and country:
- Business account type: the default withholding rate will be 30% of U.S. earnings if the payee is outside of the U.S. Businesses in the U.S. will be subject to 24% withholding on total earnings worldwide.
- Individual account type:backup withholding will apply and 24% of total earnings worldwide will be withheld.
These withholding rates will be adjusted in the next payment cycle once valid U.S. tax info is provided in AdSense. You can follow these instructions to determine which account type your AdSense account is. Important: Google will never send unsolicited messages asking for your password or other personal information. Before clicking a link, always check the email is sent from a @youtube.com or @google.com email address.
Here is the list of countries where Tax Treaty is applicable.
Submitting tax info to Google
All monetizing creators on YouTube, regardless of their location in the world, are required to provide tax info. Please submit your tax info as soon as possible. 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.
You can follow the instructions below to submit your U.S. tax info to Google. Note that you may be asked to re-submit tax info every three years, and that only Latin characters may be used when submitting tax forms (due to requirements by the IRS); learn more here
- Sign in to your AdSense account.
- Click Payments.
- Click Manage settings.
- Scroll to “Payments profile” and click edit
next to “United States tax info”.
- Click Manage tax information.
- On this page you’ll find a guide that will help you to select the appropriate form for your tax situation.
Tip: After you submit your tax information, follow the instructions above to check the “United States tax info” section of your Payments profile to find the tax withholding rates that may apply to your payments.
You’ll also be able to make any edits in case your individual or business circumstances change. If you’ve changed your address, make sure your updated permanent address is the same in both sections: “Permanent residence address” and “Legal address”. This will ensure that your year-end tax forms (e.g., 1099-MISC, 1099-K, 1042-S) are delivered to the correct location. If you’re in the US, you must resubmit your W-9 form with your updated legal address
How to make sure you have entered the correct Tax Information?
Once you’ve entered the tax information, you’ll shortly receive an email which the following content:
|Your tax information has been approved. If there are no other holds on your account and your balance is above any minimum payment threshold that may apply, you’ll be paid on a timely basis and the right taxes will be withheld (if applicable). You can view or confirm your tax information in the Google payments centre. View tax info Google can’t advise you on tax matters, so please contact your tax adviser if you have any questions.|
[Video] How to fill Correct TAX information in Google AdSense for AdSense Earnings (Pakistan)? [Hindi/Urdu]
Please watch this video for detailed step by step information. In case of any queries, please use the comments section below.
Important FAQ regarding AdSense Tax Information
What is my TIN number in Pakistan?
In Pakistan, the Computerized National Identity Card (“CNIC”) serves as a TIN for individuals; In Guernsey, the social security number serves as a TIN for individuals.
What is my TIN Number in India?
In India, TIN is officially called Permanent Account Number (PAN).
How do I know what my TIN is?
Finding your Taxpayer Identification Number (TIN)
- For U.S.-based individuals: Your TIN is the same as your social security number.
- For U.S.-based entities (corporations, partnerships, LLCs, etc.): In general, your TIN is usually the entity’s Federal Employer Identification Number (FEIN).
What is meant by TIN number?
A tax or taxpayer-identification number, also known as a TIN for short, is a number issued to individuals and organizations to track tax obligations and payments they make to the Internal Revenue Service (IRS). It is issued by the federal government.
Other Questions related to Withholding Tax, Impact on YouTube Earnings, etc.
Here you can find more detailed information.
Source: Google Support