YouTube is a unique platform. Unlike other social networks (e.g. Instagram), YouTube shares its revenues with content creators. All you need, it’s to upload clips to your channel, generate views and wait for a cheque. But be aware that this amount is pre-tax earnings because YouTubers must pay taxes.

Where Do YouTubers Pay Taxes?

You can make clips and upload them to YouTube in any country, but you have to pay taxes in the country where you are a resident for tax purposes.

The majority of people are tax residents of countries that issued them passports. Therefore, if you have a UK passport, you will likely have to pay your taxes in the United Kingdom. However, this is not because having a UK passport automatically means you have to pay all your taxes in the UK. The reason is different.

A legal duty to pay taxes depends on the period spent living in a country. Most people spend much of their time in the county that issued them passports. However, if a UK citizen moves to another country and spends more than 183 days per year, he may or must become a tax resident of that country and may seize being a UK tax resident.

In most countries, a 183-day rule is applied to determine when a person, either a citizen or foreigner, becomes a resident for tax purposes. However, there are exceptions. US citizens must pay taxes on their worldwide incomes even if they no longer live in the United States. A US citizen who lives abroad may qualify for the foreign-earned income exclusion. For more info, visit the website of the IRS (US tax authority).

Can YouTubers Pay No Taxes At All?

A short answer is “yes, they can”. HOWEVER, unless you are a high-net-worth individual (HNWI), paying no taxes is an out-of-reach dream. Well-paid tax advisers, frequent travelling, etc., are required to free yourself from taxes without breaking the law. These things cost a lot.

What Is a High-Net-Worth Individual (HNWI)?

The term high-net-worth individual (HWNI) refers to a financial industry classification denoting an individual with liquid assets above a certain figure. People who fall into this category generally have at least $1 million in liquid financial assets.

The assets held by these individuals must be easily liquidated and cannot include things like property or fine art. HNWIs often seek the assistance of financial professionals in order to manage their money. Their high net worth often qualifies these individuals for additional benefits and opportunities.

Sounce: Investopedia.com

Some people use illegal practices to avoid taxes (e.g. hiding received incomes from the tax authorities, forging documents, etc.). I strongly advise you against using such methods because all of them are crimes. I guess you know the story about Al Capone, a famous American gangster. He committed many heinous crimes but was only convicted of tax evasion. Governments know no mercy for their citizens trying to avoid paying taxes!

If you decide to reduce your taxes to zero, you must become a perpetual traveller. Harry D. Schultz (an American investment adviser) created the flag theory outlining key requirements for becoming the perpetual traveller.

What Is The Perpetual Traveller?

The perpetual traveler idea proposes that individuals live in such a way that they are not considered a legal resident of any of the countries in which they spend time or operate. By lacking a legal permanent residence status, the theory goes, they may avoid the legal obligations which accompany residency, such as income and asset taxes, social security contributions, jury duty, and military service. The idea has been described as a “late capitalist nomadism”.

Source: Wikipedia

How Much Do YouTubers Pay In Taxes?

Google, which owns YouTube, is required to deduct taxes from your YouTube earnings from US viewers (where applicable):

• If you are not a US resident, Google can withhold (i.e. deduct from your earnings) up to 30% of your YouTube earnings depending on tax rates in your country and whether your country entered into a tax treaty on the avoidance of double taxation with the US. (you may check it out at the IRS’s website). If your country doesn’t have a tax treaty with the US, your tax burden will likely be substantial. Google will deduct up to 30% of your earnings, and you will also have to pay taxes on the earnings in your country of residence.
• If you are a US resident and provided Google with your tax info, Google will not withhold any taxes.
• If you don’t provide Google with any tax info and have a YouTube business account, Google may withhold (deduct) 30% of US earnings if you are a non-US resident and 24% for US residents. If you have a YouTube individual account, a 24% deduction rate applies to both US and non-US residents.

It is important to note that Google does not calculate, report or pay YouTubers’ taxes to tax authorities. YouTubers themselves are required to report their income to the tax authorities and pay taxes. By law, Google is only required to withhold taxes on income earned in the US by non-US residents.

US Residents

Let’s say you are a resident of the USA. You have to report your annual earnings (income) to the IRS. Depending on the amount of your income, the US currently has 7 federal income tax brackets, with rates from 10% to 37%. 

Note that the tax rate depends on all income received from all sources (e.g. YouTube, salary, capital gains, interest, etc.).

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