AdWords charges are about to include a 10 percent local goods and services tax (GST) for businesses registered in Australia, and for Australian-based agencies paying on their customers’ behalf.
From November 1, Australian advertisers will be billed by Google Australia rather than Google Singapore (as has been the case to date), and will need to pay GST.
The change, announced in emails sent to advertisers this week, follows a push by the Australian government to have international ad platforms like Google and Facebook pay GST.
Australian companies with G Suite business accounts (Google cloud products such as Gmail, Google Docs, Drive and Calendar) will also be charged GST on payment for those services.
Why should you care?
We’ve confirmed with Google New Zealand that nothing changes for New Zealand-based advertisers and agencies: we will continue to be billed by Google Singapore.
Australian advertisers will still see the same CPCs and budgets for their campaigns. GST will only be applied after the fact as an additional 10 percent charge on their credit card charges or invoices.
We’ve previously calculated that Google New Zealand is likely earning around a million dollars a day from AdWords advertisers here, but that is only our estimate. With this change, just what Google is earning in the Australian market will be clearer, as will the amount it should pay in corporate tax.
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Jeremy is a Partner and Senior Consultant at SureFire. Jeremy has been working in search since 1996, when he joined the Australian search engine, LookSmart. After relocating to San Francisco, he was instrumental in the development of the company’s paid search ad platform. At analytics company Coremetrics (now owned by IBM) he established an in-house search agency managing campaigns for Coremetrics clients such as Macy’s, Bass Pro and Lands End. At Acxiom he managed members of the pioneering SEO firm Marketleap and worked with clients such as Capital One, American General Finance and Kaiser Health. Joining SureFire in 2009, he is the head of Paid Search Advertising and oversees the delivery of AdWords and other PPC campaigns. He also helps clients make sense of their website data.
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