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Recently you may have seen an alert on Google Ads asking you to update your tax information to avoid being subject to higher taxes. If you’re wondering how or why this may affect you, here’s the important information you need to know!
Effective July 1st, 2021, GST/HST tax will apply to all Google Ads customers with billing addresses in Canada, who have not added a GST/HST registration number to their payments profiles. No taxes will be collected from business customers who provide a GST/HST registration number.
For customers without a registration number, Google LLC is required to charge the tax amount and therefore, to ensure taxes are collected correctly, customers must provide Google with their GST/HST registration number (if they have one).
If you do not have a registration number, there is no action required and you can expect to see the applicable tax rate automatically applied to your July invoice.
Current sales tax rules for digital transactions date back to a time before growth in e-commerce transactions, and have allowed foreign businesses to avoid HST/GST obligations. The government is concerned these existing rules put Canadian businesses at a disadvantage compared to their foreign competitors. The new sales tax is intended to create a fair tax system and maintain a strong economy.
While we are happy to provide you with up to date information regarding this change, we are not able to provide tax advice and we always suggest that you contact your tax advisor with any questions or concerns.
For information on how to update your tax information/add your registration number, go to https://support.google.com/google-ads/answer/2375370?hl=en.