Does Facebook Charge GST on Ads in NZ?

In the realm of online advertising, understanding tax implications is crucial for businesses aiming to maximise their budget effectively. One common query for New Zealand businesses is whether Facebook charges Goods and Services Tax (GST) on its ads. Let’s explore this in detail.

Understanding GST

Goods and Services Tax (GST) is a value-added tax levied on most goods and services sold for domestic consumption in New Zealand. The standard GST rate is 15%, and businesses registered for GST must charge this tax on their sales. The GST paid on business expenses can be reclaimed, making it an essential aspect of financial management for companies.

Facebook Ads and GST

From 1 September 2016, Facebook began charging GST on its advertising services to New Zealand customers. This change was in line with the new regulations introduced by the New Zealand government, requiring overseas digital service providers to collect and remit GST on services supplied to New Zealand consumers.

How Does This Affect Your Facebook Ads Billing?

  1. GST Registration: If your business is registered for GST, you should update your Facebook ad account with your GST number. This ensures that GST is correctly applied on your invoices.
  2. Invoicing: Facebook Ads invoices will show the GST amount charged, providing transparency for your accounting and enabling you to claim back the GST if your business is eligible.
  3. Claiming GST: Registered businesses can claim back the GST paid on Facebook Ads as part of their GST return, provided the ads are used for making taxable supplies.

Steps to Ensure Compliance

  • Update Your GST Number: Make sure to provide your GST registration number in your Facebook Ads account settings. This is crucial for the correct application of GST on your invoices.
  • Review Your Invoices: Regularly check your Facebook Ads invoices to ensure GST is being charged correctly. If you notice any discrepancies, contact Facebook Ads support for clarification.
  • Seek Professional Advice: If you are unsure about how GST applies to your Facebook Ads expenses, consulting a tax advisor is a good idea. They can offer guidance specific to your business needs.