Following the introduction of the UK digital services tax which came into force in April, Google has now confirmed that it will pass on this cost directly to advertisers (ie. hotels, OTAs etc.). From November 1st 2020 Avvio’s digital customers will see these fees (2% for ads served in the UK and 5% for Turkey and Austria) included in their Google invoices.
In an email sent out to all customers the Google Payment team said:
“As of 1 November 2020 we will begin adding a fee to your next invoice or statement for ads served in specific countries:
- Ads served in Turkey: a 5% Regulatory Operating Cost added to your invoice or statement
- Ads served in Austria: a 5% Austria DST Fee added to your invoice or statement
- Ads served in the United Kingdom: a 2% UK DST Fee added to your invoice or statement
The Regulatory Operating Costs are being added due to significant increases in complexity and cost of complying with regulations in Turkey. In Austria and the United Kingdom, the DST fee is driven by the new digital services tax in these countries.”
Not surprisingly ad spending has been hit hard by COVID. Our industry is starting to see some lights at the end of the tunnel and planned digital investment is coming back as demand increases.
What does this mean?
From November any ad you serve in the UK will incur an additional 2% fee. In Turkey and Austria a 5% fee will be added.
Is it based on where my agency is or where the ad is served?
It is NOT based on your hotel or agency location. The fee is applied depending on where the ad is served:
- A UK hotel who only adversities to the USA market would not incur the fee
- An Irish hotel who targeted the UK market (including N. Ireland) would incur the fee
Google support: Learn more here about Country specific fees
How to prepare for the change
These fees will be added on top of your account budget so be prepared to factor that into your budgeting.
For example, if you have a budget of £100 and accrue £2 in UK DST Fees for ads served in the UK, you’ll be billed £102.