Starting October 1, 2024, Google will introduce a new surcharge for ads served in Canada, known as the Canada DST Fee. This surcharge is being added as part of Google’s effort to comply with digital services tax (DST) legislation in Canada. If you’re a marketer or business owner using Google Ads to reach customers in Canada, it’s important to understand how this change will affect your ad spending and budget management.
What is the Canada DST Fee?
The Canada DST Fee is a 2.5% surcharge that will apply to all ads served in Canada, even if the advertiser is located outside of Canada. This new fee will be reflected in your Google Ads account and on your invoices or statements, starting with ads that run on or after October 1, 2024.
The surcharge is being introduced to cover part of the costs associated with complying with Canada's digital services tax legislation. As a result, Google will pass this cost on to advertisers who serve ads in Canada.
How Will This Surcharge Appear?
The Canada DST Fee will appear as a separate line item on your invoices, statements, and within the "Transactions" section of your Google Ads account. It will clearly indicate the additional 2.5% cost applied to your ads served in Canada.
For example, if your ad budget for Canada is $100, you’ll see an additional $2.50 surcharge on your invoice, meaning you’ll be billed $102.50, plus any applicable taxes like sales tax, VAT, GST, or QST.
For those who use manual payments, the surcharge will be deducted from your balance after your payment has been spent. If you pay for Google Ads through automatic payments or monthly invoicing, the surcharge will be added on top of your account budget.
Budgeting for the Canada DST Fee
It’s important to factor in the Canada DST Fee when planning your advertising budgets for campaigns running in Canada. Although the surcharge is only 2.5%, it can add up, especially for larger ad budgets.
For businesses with ongoing ad campaigns in Canada, these fees will become a regular part of your billing, so it’s wise to review your ad spend and adjust budgets accordingly.
If you’re concerned about going over budget because of the new surcharge, consider adjusting your daily or monthly ad spend to accommodate the extra 2.5%.
Why Is Google Implementing This Fee?
The Canada DST Fee is part of Google’s response to digital services tax laws that are being introduced in several countries, including Canada. These laws aim to tax global digital companies for the services they provide to local markets. Google is passing on part of the compliance costs to advertisers.
While this may feel like an additional burden on advertisers, it’s important to remember that these taxes are becoming more common globally. As digital advertising continues to grow, more governments are looking to regulate and tax these services.
Let Good Commerce Help
Navigating these new budgetary changes may be challenging. We’re here to help - let us optimize your ads and refine your ad spend allocation to help you get the most out of your Google Ads. Get in touch with us today and let’s talk strategy.