Google plans to pass on the entire cost of a new UK 2% digital services tax to advertisers. It has written to its clients to tell them that, from 1 November, they will be paying a new 2% charge on their adverts served in the UK.
Where the charge is higher – like in Austria and Turkey – the increase in charge will reflect the tax (in these cases 5%).
Advertising agencies told Campaign magazine that the 2% UK levy will apply to media spend on Google Ads, but will not apply to spend on DV360 Google’s demand-side platform, where programmatic ads are bought via an online auction.
Amazon said it too would be passing on the cost of the tax to its marketplace sellers, and Facebook and Microsoft are expected to follow suit. eBay have bucked the trend, saying they will absorb the tax rather than pass the cost on to its buyers and sellers.