Google sent out an email to digital marketing advertisers yesterday to explain an increased cost that will roll out in November. Google have advised that they will be charging more for ads to cover the cost of taxes.
So, this means that here in the UK, Google will be raising the price for its Google Ads by 2%. The tax increase will begin from 1st November 2020. Similar measures are also being introduced in Turkey and Austria. Here is a summary of what will change:
- Ads served in Turkey: a5% Regulatory Operating Cost added
- Ads served in Austria: a 5% Austria DST Fee added
- Ads served in the United Kingdom: a 2% UK DST Fee added
The fee will apply to any digital marketing adverts which are served in the UK across both Google Ads and YouTube.
What have Google said?
Google have released the following statement: “Digital service taxes increase the cost of digital advertising. Typically, these kinds of cost increases are borne by customers and, like other companies affected by this tax, we will be adding a fee to our invoices, from November. We will continue to pay all the taxes due in the UK, and to encourage governments globally to focus on international tax reform rather than implementing new, unilateral levies.”
You may have heard earlier this month that Amazon are also increasing seller fees on the platform in response to the two percent tax increase. On the other hand, eBay have announced that they will not increase fees for their users. Facebook and Microsoft will likely be making announcements about the tax charge soon.
If you have any questions about the change and how it may impact digital marketing advertisers and smaller businesses – feel free to contact us.