Facebook social networking site has introduced a 20% value-added tax on advertising purchases by Russian customers, the company announced on its website.
The tax will be imposed on advertising accounts that set Russia as the region of business. Therefore, to pay the tax, account owners must provide the correct title of their companies, address and, optionally, tax identification number).
“Because VAT is added on top of charges, you won’t reach your billing threshold faster, but you may be charged more than your billing threshold amount,” the company assured.
The American company also warned that it will not provide any tax related advice and recommended to consult with tax authorities – in this case, the Russian Federal Tax Service. Facebook clients will start paying VAT based on the law that imposes a tax on foreign companies that sell electronic content via the internet in Russia. The law came into force last year and was dubbed a ‘tax on Google’.
Since VAT is being raised from 18% to 20% starting January 1, Facebook advertisers will have to pay 20% from the very beginning.