YouTube income tax for Ukrainian creators: US withholding and Ukrainian declaration

In March 2021 Google announced that as early as June 2021 it would start withholding US tax from payments to YouTube creators outside the US. The rule still applies. This article has been updated using YouTube Help, the IRS treaty table and the Tax Code of Ukraine.

What Google withholds

According to YouTube Help, tax is withheld on earnings from US viewers: ads, YouTube Premium, Super Chat, Super Stickers, Super Thanks and channel memberships. Without tax information, Google may withhold up to 24% of an individual’s total worldwide earnings; for a business outside the US, the rate is 30% of earnings from US viewers. With tax information submitted, the rate on earnings from US viewers ranges from 0 to 30% depending on the country’s tax treaty with the US.

Ukraine and the US have a double taxation treaty. The IRS rate table lists 10% for copyright royalties for Ukraine, under Article 12(2) of the treaty. The reduced rate applies once you claim it on your tax form.

How to submit tax info in AdSense

AdSense → Payments → Payments info → Manage settings → Payments profile → United States tax info → Manage tax info. The tool selects the right form from your answers about your status.

What Ukrainian law requires

• Income from a foreign source is included in total annual taxable income and taxed at 18% (subparagraph 170.11.1 and paragraph 167.1 of the Tax Code).
• Individuals also pay military levy on this income; the current wording of the Code sets it at 5% (subparagraph 1.3, paragraph 16-1, subsection 10, section XX).
• The annual return is due by 1 May of the following year (subparagraph 49.18.4), and the tax is payable by 1 August (paragraph 179.7).
• US tax paid can be credited if you have a certificate from the foreign tax authority stating the tax paid and the tax base, legalised (apostille) unless a treaty provides otherwise (paragraph 13.5, subparagraph 170.11.2). The credit cannot exceed the tax calculated under Ukrainian rules (subparagraph 170.11.4).
• If you do not have the documents on the income and foreign tax paid by the deadline, you must apply to move the filing deadline to 31 December of the following year (subparagraph 170.11.2).

Sole proprietors (FOP) follow single tax rules, and whether YouTube income fits depends on their group and registered activities. Tax rules change, so check the current wording of the Code and consult an accountant or the State Tax Service before filing.

Sources

• YouTube Help: U.S. tax requirements for YouTube earnings
• 9to5Google: YouTube will deduct US taxes (03.2021)
• IRS: Tax Treaty Table 1 (Ukraine, royalties)
• Tax Code of Ukraine (zakon.rada.gov.ua)