Beginning on October 1, 2021, Google will include a 2% “Regulatory Operating Cost” surcharge to advertisers’ invoices for ads served in India and Italy, according to an email sent to Google advertisers on Tuesday. The surcharge applies to ads purchased through Google Ads and for YouTube placements purchased on a reservation basis.
The company was already passing on digital service taxes for ads served in Austria, France, Spain, Turkey and the UK, and this is more of the same. Advertisers should be aware that these fees are charged in addition to their account budgets, so the surcharges won’t be reflected in the cost per conversion metrics in their campaign reporting. Advertisers should take these factors into account when creating their budgets.
And, if you’re thinking, “Hey, regulators are levying these taxes on Google, not on advertisers!” well, you’re not alone. Unfortunately, Google isn’t alone either as Amazon and Apple are also doing something similar by passing on their taxes to third-party sellers and developers in some territories, meaning that passing on government-imposed taxes is quickly becoming a precedent.