Last week Google announced that its customers in Spain will have to pay a 2% surcharge from May 1. This increase in rates, which will affect companies that are clients of Google’s advertising business (Google Ads) that want to show their ads in our country, is intended to cover part of the costs associated with the Tax on Certain Digital Services (IDSD) , also called Google rate.

Google is thus following in the footsteps of Amazon, a company that long ago announced that it would charge Spanish companies this tax, adding 3% to the sale price from April. The decision of both giants of the online world has provoked many reactions within the advertising sector. The Spanish Association of Advertisers ( aea ), recently issued a statement in which it is opposed to assuming the 2% surcharge that Google will impose on all advertising companies to reduce the cost of the rate.

THe Measure Undermines the Ability of Advertising Companies

“The measure undermines the ability of advertising companies to contribute to the economy as a whole”
The aea highlights that, through the tax obligations established by the State, “all advertising companies contribute in a supportive and responsible manner to the well-being of society, and that the measure adopted unilaterally by Google undermines Palestine B2B list their ability to contribute to the whole of the economy”. Likewise, it represents a de facto increase in the price of advertising services and, therefore, reduces the economic capacity of Spanish companies at a particularly difficult time for the sector due to the pandemic.

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On the other hand, the aea emphasizes that Google’s measure directly affects a part of the business. Activity that “contributes significantly to the development of digital technologies. The growth of the Internet, and that is relevant to the competitiveness of the business sector and the state income”.

World Federation of Advertisers

Also noteworthy is the study presente by the World Federation of Advertisers (WFA). Which shows that Google and Facebook account for 70% of the total investment in digital advertising. This limits that, in practice, advertising companies can each compete in a real way in the market. Before the measure carried out by Google.

The aea and the WFA urge policymakers to “seek a comprehensive approach to address. The tax challenges of the digital economy. Avoid creating a patchwork of overlapping layers of digital tax measures. That harm the contribution of business advertisers to the economy. Through advertising, since the only consequence is that more paid. For the same services without any additional contribution’

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