Google AdWords & GST
From 1 November 2016, Google started charging 10% GST on Google AdWords. Prior to this, because Australian Google AdWords customers were invoiced from Singapore (Google Asia Pacific Pte Ltd) it was exempt from GST.
1. How will it work in practice?
It is still early days but it seems that the amount you bid for your advert to be shown will be exclusive of GST. Google will add the GST after your advert has been shown. This means you will need to be aware that an extra 10% will be charged on top of what the bid price is.
2. What effect will it have on your business?
This depends on whether you are registered for GST or not.
If your business is registered for GST it will only have a cashflow impact on your business. This is because you will be able to claim the amount back when you lodge your BAS.
If your business is not registered for GST it will mean that you will be paying 10% more for Google AdWords.
On the good side, as most banks charged a foreign transaction fee as Google was billed from Singapore, you will no longer pay this fee.
3. Is there anything I should do?
You should speak to your bookkeeper or accountant to make sure they are aware of the changes. That way you will make sure, if you are registered for GST, that you claim a credit back.
4. Will companies like Facebook also start charging GST?
So far, nothing has been heard from Facebook. However, many in the industry believe that it is only a matter of time before they also start charging GST for advertising.
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