Google charges GST for clicks on Adwords in Australia
As of November 1, 2016, Google Australia Pty Ltd is required by law to charge 10% GST (Goods and Service Tax) on its services. This includes a 10% charge in addition to all Google AdWords "click budgets" (otherwise known as CPC).
Until now, because Google is headquartered offshore, there has not been GST applicable (like any other international purchase). Other social media giants, like Facebook and Instagram, are likely following suit.
So what does this mean for you?
Well if you are a business registered for GST, very little other than cashflow, as you can claim the GST back at BAS time. However, if you are a small business not registered for GST, you are going to have to pay it, and you won’t be able to claim it back.
The main thing to know is whatever your current Google Ads budgets are at present they stay the same. The GST will be added to your account AFTER the spend. So your budgets stay the same.
Important! If you run your credit card pretty close to the limit, just make sure you have enough in there to cover the extra!
Here's a copy of Google Australia Pty Ltd's official announcement regarding Google AdWords GST:
Dear AdWords Advertiser,
This email is to inform you of important changes to the Advertising Terms affecting your AdWords account [Account ID].
With effect from 1 November 2016, SG is assigning your advertising contract, including any amendments and related agreements (such as Service Agreements), to Google Australia Pty Ltd. This means that from that date, Google Australia Pty Ltd will be bound by the terms of the contract and will be providing the service to you and invoicing you for the service.
Google Australia Pty Ltd is required by law to charge 10% GST (Goods and Service Tax) on its services so you will see this appear as a new line item on your monthly statement from 1 November 2016.
Please contact your tax advisor if you have any questions regarding the tax consequences of this change.
3. Changes to the Advertising Terms
On 1 November 2016, certain sections of the Advertising Terms will be changed. A copy of the updated Advertising Terms is now available here. From 1 November 2016, those new Advertising Terms will be available in the terms and conditions finder, here.
Neither the assignment nor changes to the Advertising Terms should cause any interruption to your service. Your payment method will continue to be charged automatically, as in the past.
If you have any questions regarding these changes please click here to contact us.
The Google AdWords Team
Google Asia Pacific
Have any more questions regarding GST on Google Ads? Looking for a professional to manage or evaluate your existing Google Ads campaign? Contact our AdWords Sunshine Coast certified Digital Marketing team today for more information.