Does a YouTuber have to pay taxes?

Only if he earns money 🙂

Seriously, of course, a YouTuber has to pay taxes, at least if he is German (unfortunately I am not familiar with tax law in other countries).As a German, you are taxable with your so-called “world income”. So no matter where you earn your money – in principle, you have to pay your taxes in Germany or at least report this income to the tax office.

Several types of tax are eligible at the same time.Here is a small selection:

Income tax

Anyone earning more than the basic allowance (currently €9,000 per year) must hand over part of this income to the tax office.This is currently between 14 and 45%, depending on the level of income. In addition, there is a 5.5% “solidarity surcharge”. In total, this means between 14.7 and 47.25% (as of 2018). Those who are members of the Catholic or Evangelical Church must also pay 8 or 9% church tax (measured by income tax, not income). [Thanks to Oliver Rahner for correcting

A YouTuber must file an income tax return with the tax office (electronically) each year.The tax office will then draw up a notice and the sum will have to be paid. The tax office usually assumes that the same amount will be earned in the following year. Therefore, it will order quarterly income tax advance payments, which will then have to be paid on an ongoing basis.

Income tax is a major threat, especially for young YouTubers.These girls and boys suddenly get quite a lot of money in their hands – and usually spend it immediately. Cameras, PCs, mobile phones and so on. In doing so, they forget that this money must be taxed. At first nothing happens – but at some point (years later) the tax office notices the matter, usually due to so-called “control messages” from the donors (YouTube, companies, etc.). They deduct payments to YouTubers from YOUR taxes.

Now it’s getting tight for such a YouTuber.Non-submission of tax returns is considered to be tax evasion. Not only do taxes have to be paid at once for all the years that have elapsed, but high interest rates (6% per year) and late payment surcharges are added. In addition, a “penalty tax” is levied. Of course, advance payments for the current year are also required. Then there is a fine for evasion and you are faced with a claim that is roughly everything you have earned over the years. Of course, there is nothing left of all the money. Now you don’t even have private insolvency because of the crime (tax evasion). That means 30 years of debt.

Business tax

Most tax offices classify a YouTuber as a trader (“video production”).You are then an entrepreneur – and entrepreneurs have to pay the business tax to the municipality in which they are based. However, there is a free limit of €24,500. Few YouTubers are above that amount.

However, it may also be possible to be recognised as a freelancer (“artist”).Then the business tax is eliminated. However, such recognition is not easy, and many tax offices oppose it.

Vat

Vat (also known as VAT) is levied on certain goods and also on services sold in Germany.In principle, this also applies to the revenue from video productions. Here the rate is 19%.

Due to the “small business regulation”, VAT is only relevant for YouTubers who have raised more than €17,500 in the past year and are expected to earn less than €50,000 this year.This is not the case for the vast majority of YouTubers. You have to be in the top 50 in Germany in order NOT to be able to make use of the small business regulations.

However, if you are above this limit, you must apply to the tax office for a VAT identification number.Then you have to charge your clients 19% VAT, but you can pay the VAT paid for things like equipment, travel expenses, etc. offset. By the 10th of a month, you must then report the result of this invoice to the tax office and, if necessary, pay the tax debt. It may well happen that you get money back.

German YouTubers do not have to pay VAT for the money that Google (YouTube) pays as a share in the advertising costs (“Google adsense”).YouTube has done this before, by paying to the Irish state (headquarters of YouTube Europe). Nevertheless, the sum must be reported monthly, for statistical reasons.

As you can see, the subject is not without its means.I recommend that any YouTuber earning more than €9,000 be mandated a tax advisor – otherwise this can be nasty.

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