Google to pass Digital Service Tax back to customers
2% Google advertising increase in UK from 1st November
Back in September Google announced that it would be avoiding its UK's Digital Services Tax (DST) liability by passing the costs directly back to advertisers from November 2020.
So from 1st November all ads served in the UK will attract an additional 2% "DST Fee". This will be automatically added to all Google billings from that date.
In our view this is a deeply unethical political decision to push back at various European Governments' attempts to impose a revenue tax to prevent the so-called 'Big Tech' companies avoiding paying no or little tax in the national markets that they operate in.
In their guidance notes Google suggests that all advertisers should review their budgets to prepare for the increased expenditure, and we would agree - we would consider reducing Google expenditure by possibly 10%-20% and diverting that to other advertising platforms, such as Bing, who are as yet not passing on the DST to their advertisers. If enough advertisors vote with their feet, perhaps Google will realise that although strictly legal, such behaviour is counter-productive.
If you don't already advertise on Bing, talk to us about setting up a new account.