*This article does not represent financial advice. You should always speak to a professional about your situation.
Are you considering using Facebook advertising to promote your business but wondering if you need to pay GST on your ad spend?
If so, you’re not alone! In this blog post, we’ll explore the GST implications of Facebook advertising and guide handling this tax.
First, let’s define what GST is?
GST stands for Goods and Services Tax, a value-added tax levied on most goods and services in Australia. If you are registered for GST, you are required to charge GST on the goods and services you sell, and you can claim credits for the GST included in the price of the goods and services you buy for your business.
Let’s get to the question: Does Facebook Advertising Fall under GST?
The answer is yes – Facebook advertising is considered a taxable supply for GST purposes. It means that if you are registered for GST and use Facebook advertising to promote your business, you will need to pay GST on your ad spend.
However, there is an exception to this rule. If you are an “entity with an annual turnover of less than $75,000,” you may be eligible to claim the GST-free threshold.
It means that you do not need to charge GST on your taxable supplies, and you cannot claim credits for the GST included in the price of your purchases. If you fall under this threshold and use Facebook advertising to promote your business, you will not need to pay GST on your ad spend.
It’s important to note that the GST-free threshold applies to your annual turnover, not just your Facebook ad spend. If your annual turnover exceeds $75,000, you will need to pay GST on your Facebook ad spend, even if your ad spends less than $75,000.
So, if you are registered for GST, and your annual turnover exceeds $75,000, you will need to pay GST on your Facebook ad spend. If you are registered for GST, but your annual turnover is less than $75,000, you will not need to pay GST on your Facebook ad spend. And if you are not registered for GST, you will not need to pay GST on your Facebook ad spend.
We hope this blog post has clarified the GST implications of Facebook advertising. If you have further questions, don’t hesitate to contact a tax professional for guidance.
