Popularized as the 'Google Tax' at the time of its drafting into law (just two years ago)The new digital services tax originated in the form of a tax on large technology platforms: Google, Amazon... also coinciding with the Tobin Tax (a contribution aimed at the purchase and sale of shares).
Oriented mainly to targeted advertising companies in terms of tastes or interests (and therefore via cookies)We must not forget that intermediary services are also included in the combo: Uber, Cabify, Booking or Airbnb. Exempt :
- A direct online sales partnership with the supplier. For example, El Corte Inglés or Carrefour.
- A tool for the sale of goods and services between private users. Modeled on eBay, Wallapop or Vine.
- Online mediators that supply digital content, or provide payment services.
- Financial services, or data transmission services, regulated by entities.
- Digital services between entities of the same group, with a participation of 100% either directly or indirectly.
The Spanish government intended to make these companies accountable where they generate profits. However, reality is far from expectationsThe company's main competitors, and for the moment, some of those that have spoken out, such as Google and Amazon, will pass this burden on to the advertisers themselves. (or at least part of it).
Approved last October, the law 04/2020 LIDSD gravel with a 3%.
In particular, Google has been charging this tax for digital services on customers in countries such as Turkey (5%), Austria (5%) and the United Kingdom (2%) since November 1, 2020. Therefore, it was expected that Spain could not delay much longer, and according to a circular sent by the Sillicon Valley giant this week, it will start to be effective from May 1 with a 2% on the investment of the particular account. (on the same date coincides with France).
Method of collection
Referring to the own information from the support pagewill be done in two ways:
Automatic payments and monthly billing
Adding the fee to the corresponding cost in GoogleAds at the end of each month. For example, with a budget of 100 €, we would accumulate 2 € in taxes and the invoice would amount to 102 € (and in addition, other taxes such as VAT).
Manual payments or prepayments
It is possible that the collection will be after the payment has been completely exhausted, so the balance will remain open by subtracting the appropriate amount. Following the same guideline, with a 2€ regulatory operating cost fee for published ads, making a payment of 100 €, we would have a credit (or available balance) of 98 €.
Likewise, as in the previous model, we will continue to be subject to other taxes such as VAT.
To consult all these movements, we can go to the section Billing > Summary > Transactions of the Google Ads account.
Maryland's digital advertising services tax
A few weeks ago, Maryland became the first U.S. state to impose a tax on digital advertising. (but most likely not the last).In contrast, this applies to companies that generate more than $100 million. based on income and not from the investment, as is the case in Europe.
The rate will range from 2.5% to 10%, depending precisely on the turnover. In the case of Google, generating more than 15 billion dollars, its percentage is the maximum: 10. It comes into effect from this fiscal year and the funds will be destined to Maryland schools.
As in Europe, back in September, a Google spokesperson already announced that these costs would be borne by customers. However, in this case, in order to prevent this, the Maryland General Assembly introduced a new bill to SB 787prohibiting the passing on of this charge to advertisers. (at least not in a direct way).
Likewise, it will not be so easy, since neither Amazon, nor Facebook, nor Google are based in Maryland, so they can claim that the law violates the Constitution by imposing taxes originated outside the State.
What we can say for sure is that the debate is already on the table. As a client, will you adjust your budget by discounting this new fee, do you think that a new regulation can come to Europe improving this law, as it happened in Maryland, how will it affect the agencies, and we are waiting for your opinion in the comments!