Are you someone who uses YouTube and gets paid for it? Then this may apply to you.

IRD recently released a QWBA that considers the taxation of YouTube receipts. In the statement they consider that in many cases the receipts will be taxable. Some examples provided are:

  • Advertising revenue (AdSense income from Google).
  • Affiliate income (earning a commission by promoting other people’s or companies’ merchandise on your YouTube channel via external annotation links).
  • Paid content (fee received for purchase/rent of a video or subscription to a YouTube channel).
  • Sponsorship (fee earned from product placements or endorsements).

The issue here is that the Tax Act doesn’t limit taxation to income derived from businesses. It also taxes income “under ordinary concepts” and income that is considered to be from a “profit making undertaking or scheme”. These concepts apply widely and can include many types of income including income that some may feel is from a hobby. So if you derive income of this nature and are unsure about whether it is taxed then it may be worth having a chat with your tax advisor.

For those interested the QWBA has some interesting examples.

Consequently, the question is how far this application goes to tax the income of those out there that may be having a bit of fun, and how IRD will be able to police this type of activity as despite the fact that NZ has self-assessed tax system, there will be many out there that won’t know the finer points of the income tax rules.