GST on Google Payments

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Picture of The Accounting Hub

The Accounting Hub

One small but important change that we have noticed recently is that Google has started charging GST for it’s G Suite (email, apps and storage products) and for advertising.

google sign

You’ll need to revisit any rules that you have set up in Xero to make sure that you are claiming the GST on these payments. From the paperwork that we have seen it looks like this change took effect from 1 November.

Of course, you will need to have a tax invoice on file to claim the GST on those expenses. For G Suite, Google send out a tax invoice, which can be filed in the normal way (ideally attached against a Xero transaction using Xero’s  email to bill feature or else Receipt Bank )

For Google Ads (formerly Adwords), actually getting an invoice seems to be a bit more complicated. Currently their help section gives advice on how to get an invoice here. We haven’t been able to test this yet – invoices will be available at the end of the month.

Watch this space – expect Facebook and other international services to follow suit. Google is responding to pressure from the government’s work to “Neutralise Base Erosion and Profit Shifting”. This change will have no effect on the amount of tax that you pay in NZ (you’ll pay extra GST, then claim it back). It will mean though that the government ends up collecting a lot more tax from Google and Facebook as well as other multinational companies – most would agree this is a positive thing.

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