GST on Facebook Advertising Costs

Due to recent changes to tax laws in Australia, Facebook ads purchases in Australia will be subject to a goods and services tax (GST) of 10% beginning August 1, 2018. This change will affect all ad accounts that have their business country set to Australia. However, if your business is registered for GST, you can add your Australian Business Number (ABN) to your Facebook ad account so that you won’t be charged GST on ads purchases. To learn more about this, see the “Information for GST-registered businesses” section of this article.

For all other advertisers, GST will be added whenever you’re charged for your ads. As an example, let’s say you were recently charged $50 because you reached your $50 billing threshold. The subtotal for the charge will be for $50 in ad costs, and then a 10% GST will be added on top of that, so you’ll pay $55 in total for that charge ($50 + $5 = $55). Because GST is added on top of charges, you won’t reach your billing threshold faster, but you may be charged more than your billing threshold amount.

Keep in mind that any charges for ads that occur on and after August 1, 2018, will be subject to GST. This includes charges for ad costs you may have accrued before then. For example, if you have outstanding ad costs from ads you ran in July, but your monthly bill date isn’t until August 2, 2018, GST will be included when you’re charged for those costs (unless you’ve added an ABN to your account).

You can check how much you paid in GST for a specific charge by referencing your ads receipts, which you can view and download in the Billing section of your Ads Manager. On your ads receipts, the amount you paid in GST will be listed next to your payment totals:

Information for GST-registered businesses

If your business is registered for GST, you can add your ABN to your Facebook ad account so that you won’t be charged GST on ads purchases. By providing an ABN, you’re confirming that your business is GST registered, advertising for business purposes and therefore shouldn’t be charged GST on advertising services provided by Facebook to you.

Here are a few other things to keep in mind about adding your ABN to your ad account:

• While Facebook won’t charge GST until August 1, 2018, any previous unpaid ad spend that you’re charged for on or after August 1, 2018, will be subject to GST. You can add your ABN to your ad account before August 1, 2018, to avoid being charged GST on any ads purchases.
• After August 1, 2018, you’ll stop being charged GST only after you add your ABN to your ad account (even if your business was registered for GST before then).
• If you have multiple ad accounts you run ads with, you’ll have to add your ABN to each one that you want to associate with it.

The Money Edge | Bundaberg