Twitch streamers and paying taxes from donations

[Voij]

But this was a question. I don´t know if Twitch donation earning is considered as a "gift" or as an "income" in my country. In Europe, there are alot of different countries, with alot of different laws, taxes and everything. And if the country is part of an European Union, there are another extra laws for European Union. So i don´t really know how it works here.

Currently being trained to work as a German tax official, so I can really only offer the view from my own country for this, but here goes:
The "donations" that the streamer receives are part of the income he makes from his professional activities. He improved his behaviour, his presentation, his entertainment value in order to be able to receive these "donations."
Because of that they are considered business-income and NOT tax-free. He had the intention of receiving money for his streaming, which is the deciding factor behind it getting taxed.

It would be different if he were to do it as an actual hobby, without any intention of making money out of it. Those things are tax free here.

[Lancer]

It irritates me to no end that I bust my ass 40+ hours a week just to make less than some nerds who happen to have been born into situations where they can feasibly sit on their ass all day playing vidya :/

Not relevant, it's just 6 AM and I'm salty.

Perhaps pin your anger on the people that give them money instead.

[Gilian]

I don't know how Twitch works but in The Netherlands if tips go straight from a third party to you, so without your employee paying taxes over the amount, then you will have to pay taxes over it.
I wouldn't even bother if it's a small amount and you are not making a living out of it. If they find out you just pretend you didn't understand and pay up the taxes. It might be that you have to pay a fine but most of the time they let them drop if you object and have a reasonable explanation. I work at a small accountancy office and in the 6 years I worked here we had a handful of random checks, it's actually pretty laughable.

[Deleted]

nobody should donate to streamers, its sad and pathetic. bunch of wannabes seeking attention .

same with MFC or chaturbate or wtv, I just fap for free while a bunch of morons waste their paycheck just for a bit of fake personal attention.

[Shriekk]

The "donations" that the streamer receives are part of the income he makes from his professional activities. He improved his behaviour, his presentation, his entertainment value in order to be able to receive these "donations."
Because of that they are considered business-income and NOT tax-free. He had the intention of receiving money for his streaming, which is the deciding factor behind it getting taxed.

It would be different if he were to do it as an actual hobby, without any intention of making money out of it. Those things are tax free here.

How do you prove the person is doing it for profit or just as a hobby? One could argue that they dress better, act better, and want better equipment due to the increasing number of people watching.

Say you do start streaming solely as a hobby. You gain popularity and people start subscribing/donating, but you're still only interested in it as a hobby. At what point is the line drawn between a hobby and a profession even if you inadvertently crossed that line?

[mmocfd1b0ab5a3]

Popular streamers make a lot of money. Let's take Trump for example. He has ~500k subscribers according to his profile and I assume Twitch takes 50% of subs fee so he is making ~1,25m$ per month just via subscribe fee. Add donations to that and it's probably 1,26m per month. IF he buys something big like cars and houses then they get busted and have to pay taxes. Thats why they live in small apartments.

[Deleted]

How do you prove the person is doing it for profit or just as a hobby? One could argue that they dress better, act better, and want better equipment due to the increasing number of people watching.

Say you do start streaming solely as a hobby. You gain popularity and people start subscribing/donating, but you're still only interested in it as a hobby. At what point is the line drawn between a hobby and a profession even if you inadvertently crossed that line?

there is no line, if they don't intend to receive money, I'm sure there are a few ways not to receive any donations. stop complicating the obvious, everyone wants more money.

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Popular streamers make a lot of money. Let's take Trump for example. He has ~500k subscribers according to his profile and I assume Twitch takes 50% of subs fee so he is making ~1,25m$ per month just via subscribe fee. Add donations to that and it's probably 1,26m per month. IF he buys something big like cars and houses then they get busted and have to pay taxes. Thats why they live in small apartments.

500k subscribers? go read it again dude, and pay attention this time.

[Deleted]

I wonder if someone is going to report sodapoppin to the IRS that would be funny as hell.

[Shriekk]

there is no line, if they don't intend to receive money, I'm sure there are a few ways not to receive any donations. stop complicating the obvious, everyone wants more money.

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I'm not trying to complicate anything. I was merely asking Voij how that would work since he mentioned the other scenario of just doing it as a hobby.

Even if the streamer is lying and is totally doing it for the money couldn't you just argue (from a legal standpoint) that they're just streaming because they like to be on camera or some other dumb reason?

[Deleted]

How do you prove the person is doing it for profit or just as a hobby? One could argue that they dress better, act better, and want better equipment due to the increasing number of people watching.

Say you do start streaming solely as a hobby. You gain popularity and people start subscribing/donating, but you're still only interested in it as a hobby. At what point is the line drawn between a hobby and a profession even if you inadvertently crossed that line?

Is there a way to disable donations and\or all revenue? because if there is, I believe you have your answer right there.

the real debate lies at those people that donate, they should be ashamed, really. its pitiful, streamers are smart tho, they play those fools very well.

[Deleted]

Popular streamers make a lot of money. Let's take Trump for example. He has ~500k subscribers according to his profile and I assume Twitch takes 50% of subs fee so he is making ~1,25m$ per month just via subscribe fee. Add donations to that and it's probably 1,26m per month. IF he buys something big like cars and houses then they get busted and have to pay taxes. Thats why they live in small apartments.

Followers != subs.

[Voij]

I'm not trying to complicate anything. I was merely asking Voij how that would work since he mentioned the other scenario of just doing it as a hobby.

Even if the streamer is lying and is totally doing it for the money couldn't you just argue (from a legal standpoint) that they're just streaming because they like to be on camera or some other dumb reason?

The first difficulty is actually finding out that someone has income through something like this. There's no time to check everybody, most banks don't care enough to find out where their clients money comes from if it's not in the millions, and if someone doesn't declare it and is otherwise below the free value, there's pretty much nothing you can do about it.
The only hope that's left is having them admit to these incomes. Motivation for this, from the streamers point of view, is probably that they'd want to escape a prison sentence should it ever get out that he committed intentional and massive tax evasion.

The nice thing, from the government's point of view, is that burden of proof lies with the streamer.
If he does it as a hobby, he has to prove this. Until then, it's assumed that he's trying to gain money from streaming. [This is not something easy to prove, though.]
If he had a reason not to declare it, he has to prove it. Until then, it's assumed that he was intentionally evading taxes.

[Shriekk]

Is there a way to disable donations and\or all revenue? because if there is, I believe you have your answer right there.

I have no idea. I wrote the question under the assumption that there wasn't.

[Deleted]

get people to donate in a crypto currency. not as easy to trace, and or be audited / pay taxes on

Yeah but how would you spend that money, aside from illegal stuff like drugs?

[Xjev]

You may have to pay less tax since the company your getting money from is outside your country.

[Butler to Baby Sloths]

You may have to pay less tax since the company your getting money from is outside your country.

You may have to pay tax in the US if you earn the money on Twitch as a foreign citizen, as the service is based in the USA.