If you notice that your click-spend has increased in November – it’s because GST has been added to Google Advertising click-spend from the 01/11/2018.
In a sneaky email from the Search Engine in early October, they announce that:
As of 1 November 2018, Google Asia Pacific Pte. Ltd. is assigning your contract relating to your New Zealand Google Ads account, including any amendments and related agreements (such as Service Agreements), to Google New Zealand Limited, as a reseller. This means that from that date, Google New Zealand Limited will be bound by the terms of the contract and will be invoicing you for that service. All other non-New Zealand Google Ads accounts that you may have will continue to be serviced outside of New Zealand.
If you pay by invoice, shortly after the assignment date you will start receiving invoices from Google New Zealand Limited (rather than Google Asia Pacific Pte. Ltd.) with new payment details/remittance information. When this happens, please make sure that you send payments using the new remittance information.
Google New Zealand Limited is required by law to charge 15% GST (Goods and Service Tax) on its services, so you will see this appear as a new line item on your invoices from 1 November 2018.
Please contact your tax advisor if you have any questions regarding the tax consequences of this change.
This was brought into Australia from the 01/11/2016 so we knew it would happen eventually.
What are the possible repercussions for my business?
Either your click-spend bills will increase by 15%, or you could talk to your Google Ads supplier about decreasing your click-spend by 15% but this will result in your site potentially receiving 15% less clicks.
To read more about Google Taxes in NZ – click here
Questions or queries? Give us a call on 0800 878 833 today.