Declare your income
Income from YouTube in most cases will be considered income of the recipient. The only instance in which it will not be income is if it is considered a hobby. In order to make money from YouTube it requires significant effort and a lot of videos/subscribers. Hence it would be unlikely that anyone receiving money from YouTube from a hobby, it will often constitute a business.
YouTube receipts (or receipts from similar online sources, such as Vimeo or Twitch) are no different from any other type of receipt. There are no separate provisions within the income tax laws that deal specifically with receipts from online or web-based activities. Where relevant, current tax laws and interpretations apply, some of which are listed below.
Under s CB 3 of the income tax act 2007, an amount a person derives from carrying on or carrying out a profit-making undertaking or scheme is their income. Essentially, an undertaking or scheme is a programme of action, a series of steps, or an enterprise directed to an end result. The words “undertaking or scheme” suggest activities that are co-ordinated by plan or purpose.
In the tax case Reid v CIR (1985) 7 NZTC 5,176 (CA), Richardson J described the concept of income as comprising three features:
• Income is something that comes in.
• Income imports the notions of periodicity, recurrence and regularity.
• Whether a particular receipt is income depends upon its quality in the hands of the recipient.
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