YouTube on Wednesday notified its non-US users that it is updating its Terms of Service on the collection of facial recognition data, the company’s right to monetize, and tax-withholding on US earnings. The new terms will take effect on 1 June 2021 for users outside the US. YouTube notified a similar update to US users in November 2020.
What are the changes?
1. Facial recognition restrictions: Although the terms already state that you cannot collect any information that might identify a person without their permission, it did not specifically mention facial recognition information. The updated terms make that explicitly clear.
2. YouTube’s right to monetise non-partners: YouTube has clarified that it has the right to monetise all content on the platform by showing ads on videos from channels that are not in the YouTube Partner Programme (YPP) as well. Previously, creators had to join YPP in order to allow ads to be served on their channel and these creators earned a certain share of the ad revenue. To join YPP, creators must have either 4,000 valid public watch hours in the last 12 months or more than 1,000 subscribers. But now ads can be shown on channels that are not part of YPP, and the creators will not earn any share of the ad revenue from this.
3. Royalty payments and tax withholding: Revenue payments from Google to creators on earnings generated from US viewers will be considered royalties from a US tax perspective, and Google will withhold taxes on these earnings as required by law. This includes earnings from viewers in the U.S. through ad views, YouTube Premium, Super Chat, Super Stickers, and Channel Memberships. This means that non-US YouTube creators, including Indian creators, who are part of the Partner Programme will see a tax withholding from their earnings.
Google has already started asking its creators outside of the US to submit tax info in AdSense to determine if any tax withholding applies to their payments, and if creators fail to submit these details they may see a deduction of up to 30% of their total earnings. While the tax rates vary between 0-30% depending on the country of the creator, India has a treaty with the US which sets the withholding rate to 15%. The company indicated that it will begin withholding taxes on payments starting with the July 2021 payment.
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