Facebook advertising is a very powerful tool for your business to reach your target audience. And if you’re considering using Facebook advertising for your business but wondering if you need to pay GST? Then don’t worry, in this article, we’ll explain to you all the GST implications of Facebook advertising and guide you on how you can handle this tax.
If you’re expanding your business through Facebook Advertising then you may also curious about Facebook Marketplace. Because you can easily sell your items on Facebook Marketplace. You can check here how to list items on Facebook Marketplace.
What GST Is?
GST stands for Goods and Services Tax, a value added tax levied on Goods and Services transactions, including Facebook Advertising in Australia. If you’re registered for GST, you’re required to collect 10% GST on the sales of your Goods and Services and remitted to the Australian Taxation Office (ATO).
You can also claim credits for the GST included in the price of the goods and services you buy for your business
Does Facebook Advertising Fall under GST?
Facebook advertising is considered a taxable supply for GST purposes. It means that if your business is registered for GST and you’re using Facebook advertising for your target audience, you will need to pay GST on your ad spend.
However, there is an exception to this rule, If your business annual turnover is less than $75,000 in Australia, you may be eligible to claim the GST free threshold. It means that you do not need to charge GST on the sales of your Goods and Services.
If you fall under this threshold and use Facebook advertising to reach your target audience, you will not need to pay GST on your ad spend.
It’s important to know that the GST free threshold applies to your annual threshold, not just your Facebook ad spend. If your annual turnover exceeds $75,000 in Australia, you will need to pay GST on your Facebook ad spend, even if your ad spends less than $75,000.
So, if your business is registered for GST and your business annual turnover exceeds $75,000, you will need to pay GST on your ads spend. But if your annual turnover is less than $75,000, you will not need to pay GST on your Facebook ad spend.
What are the Benefits of GST for Businesses?
The impact of GST on Facebook ads seems like a burden for businesses, but it also brings several benefits for businesses. It allows businesses to avail of tax credits, where they can claim refunds for the GST paid on Facebook ads. This can significantly reduce the overall advertising costs.
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FAQs
Conclusion
Facebook advertising is considered a taxable supply for GST purposes. It means that if your business is registered for GST and you’re using Facebook advertising for your target audience, you will need to pay GST on your ad spend.
We hope this article has clarified to you the GST implications of Facebook advertising. If you have any queries, don’t hesitate to contact a tax professional for more guidance.
