The web giant revealed that from November 1st, advertising prices will increase by 2% in the United Kingdom and 5% in Austria and Turkey after the introduction of new taxes.
Several European governments have taken legal action against US-based technology giants, including Google, in an attempt to verify the alleged dominance of online space and make some profit from the huge revenues these companies are making
“Regulatory operating costs are added due to the significant increase in the complexity and cost of regulatory compliance in Turkey. In Austria and the United Kingdom, the digital services tax (DST) is dependent on the new digital services tax in those countries,” Google said in a statement.
Customers in the United Kingdom could face millions of pounds in additional spending on Google ads, which are also posted on YouTube, but the potential benefits of such exposure could make the additional costs profitable.
The UK introduced its digital services tax in July 2019, targeting search engines and social networking platforms such as Amazon, Facebook and Twitter that were also affected along with Google, which said 1.6 billion pounds of revenue last year.
The tax, which came into effect on April 1, is a 2% tax on revenue of more than £25 million generated in the UK for companies with more than £500 million in global sales, the government expects it will eventually generate around £500 million each year.
“Taxes on digital services increase the cost of digital advertising,” a Google spokesman told The Guardian. “These types of cost increases are usually borne by customers, and like other companies affected by this tax, we will be adding charges to our bills starting in November. We will continue to pay all taxes due to the UK and encourage governments around the world to focus on international tax reform rather than implementing new unilateral taxes. »
Amazon has already announced that it will also increase the UK’s sales rates by a similar margin of 2% to cover the costs of the tax.