The global social networking site Facebook has recently announced it has made a change to the VAT rate for those who advertise on the site. Unless you state your VAT registration number (including country prefix) prior to the purchase of the adverts you will be charged Irish VAT.
Facebook states that if you are ‘purchasing adverts for a business purpose and your principal place of business is not in Ireland, Irish VAT will not be added to your purchasing costs’. However, it is up to the user to ensure they state the location of their business; otherwise their purchasing costs could cost them up to a staggering 21% extra. Facebook also states that in regards to your location ‘you may be required to self-account for the applicable VAT in your jurisdiction of residence or establishment’, so you may be required to account for VAT depending on your area of residence.
If you are purchasing adverts for a non-business purpose then Irish VAT will automatically be added to the cost of your purchase. However, as a business it is important not to be stung by this charge if it is not applicable to you. Many businesses advertise on social media sites so this step is slightly worrying as it is perhaps a sign of things to come. Here at Orchid Box we advertise for our clients on Google, Yahoo, Bing, and social media sites such as Facebook and Linked In, but if VAT was charged on top the SEO process would become a lot more expensive for our clients.
If you have any queries about these changes please visit – https://www.facebook.com/help/contact-us?show_form=ads_hc870
