If you have questions about the DST ‘digital service tax’ introduced into the UK 1st Nov, you are not alone. Below, we will pass on the information we have gathered.
In a move similar to Italy and France, DST was introduced to try to force large businesses that provide a social media service, search engine or an online marketplace to pay more to the exchequer.
However, unfortunately in the case of Google, the result of this means that UK advertisers will now have a 2% tax bill added onto their ad spend.
- How will these costs be worked out?
The taxes and fees will be charged on top of ad spend and will be calculated as a percentage of the ad spend.
- Where will these fees appear?
The fees will appear in the account’s monthly invoice as a separate line item per country.
- Are there any other countries affected by this?
Yes, the tax will be 5% in Austria and Turkey.
- Are other advertisers doing this?
Amazon has said that it would be passing on the 2% tax to sellers on its platform, Facebook is expected to follow suit.
- How do we make sure we don’t go over budget?
We can adjust the ad spend accordingly to make room for the 2% Google Ad Tax in the budgets.
What does this mean for your digital marketing strategy?
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