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YouTube Income and VAT threshold / registration

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  • 21-05-2021 3:31pm
    #1
    TripleAce
    Registered Users Posts: 1,454 ✭✭✭


    Hi,

    I have an LTD. company setup here in Ireland - the income comes from different YouTube channels that I own and at the moment my income is just about under the 37.5k/year (rolling 12 months) threshold for not having to pay VAT, however this will be changing soon as earnings are growing fast, and so if I want to continue I would need to apply for VAT. As Google is incorporated in Ireland, Ireland is the only EU country where VAT is charged on YouTube/Adsense revenus (FML) and 23% would be massive.
    The business has also very little expenses, so claiming VAT on purchases back won't mean much.

    I am looking into different options and would like to hear some opinions, maybe from somebody who went through the same issue.

    1) I was thinking to split the company into 2 or more companies. The nature of my YouTube channels is Education, and basically I have replicated the original channel in different languages. However, due to business fragmentation regulations it looks like I am not allowed to do so. Also, despite of my channel being about education, because it's in the "Personal Development" space it looks like I cannot avail of the VAT exemption for Educational businesses.

    2) Setting up an offshore company. I have looked into different options and it seems very easy and straight forward to setup a business in Estonia. Corporate Tax would be paid only on distributed profits and if goes between 14-20% and I won't need to charge VAT on YouTube income as the company is based outside Ireland. This is a bit of a pain though, a route I'd prefer to avoid if possible, even because Corporate Tax here in Ireland is actually good at 12.5%

    I wonder how other YouTubers in Ireland handle this? Are you paying VAT on your income? Thanks in advance to anyone who can help.


Comments

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    #2
    antoinolachtnai
    Registered Users Posts: 9,773 ✭✭✭antoinolachtnai


    You are going to need accounting help with the VAT bit I think. The way you describe VAT is not really how it works.

    When you register I think you will charge YouTube VAT I think, on top of what you currently get. You will then remit the VAT you collect to Revenue.

    Don’t be incorporating companies without advice. You will just be making your setup more complex and harder to administer.


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    #3
    TripleAce
    Registered Users Posts: 1,454 ✭✭✭TripleAce


    antoinolachtnai wrote: »
    You are going to need accounting help with the VAT bit I think. The way you describe VAT is not really how it works.

    When you register I think you will charge YouTube VAT I think, on top of what you currently get. You will then remit the VAT you collect to Revenue.

    Don’t be incorporating companies without advice. You will just be making your setup more complex and harder to administer.

    Thanks! Yeah, I am currently working on this with my accountant but the situation doesn't look positive. I hope it's true what you said though, I will try and contact YouTube directly to ask the question - in that case there would be no problems. Fingers crossed. Thanks for your tip!


  • Options
    #4
    capefear
    Registered Users Posts: 771 ✭✭✭capefear


    I assume you get notification from google what they are paying you for the previous month and you currently have to send them an invoice for that amount.

    When you are vat registered, google will still tell you each month how much your due the only difference is going forward is you will be adding 23% vat to your monthly income and them paying this vat to the revenue.


  • Options
    #5
    TripleAce
    Registered Users Posts: 1,454 ✭✭✭TripleAce


    capefear wrote: »
    I assume you get notification from google what they are paying you for the previous month and you currently have to send them an invoice for that amount.

    When you are vat registered, google will still tell you each month how much your due the only difference is going forward is you will be adding 23% vat to your monthly income and them paying this vat to the revenue.

    Thanks! At the moment I don't send them an invoice, it's all done automatically in Adsense, and I keep the receipt of payment generated. I found this article though, and it looks like as you said in future I will have the send them an invoice and they will pay for the VAT, which is great!
    https://support.google.com/adsense/answer/1322031?hl=en


  • Options
    #6
    ewheels15
    Registered Users Posts: 3 ✭ewheels15


    Hi how’s things, I’m in the same position myself at the moment and was searching for answers about the vat from YouTube/ Google here in Ireland. Did you find out if google withhold the vat? 23% is a huge chunk to take off if I have to set up a company wondering what is the best way to go about it



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  • Options
    #7
    raimikizzi
    Registered Users Posts: 2 ✭raimikizzi


    https://www.boards.ie/discussion/2058187818/youtube-income-and-vat-threshold-registration


    Hi, I'm in the same situation as you. 3 years have passed since your last post, Did you find the best solution to avoid paying big taxes? I will be glad to any response



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