Facebook advertising services are becoming more expensive for Ukrainians

A planned price increase for Google services is expected in January 2022. The American corporation announced it in an official letter sent to its clients from Ukraine. According to the text of the letter, Ukrainian users will have to pay 20% more. The Meta company announced the same innovations. The reason for this decision was the tax bill, which directly concerns the activities of foreign companies on the territory of Ukraine. Thus, advertising on Facebook and other services will cost advertisers much more.

The increase in prices for Facebook services

Users of various paid services provided by Google have received an official letter from the company warning of price increases for the services it provides. Referring to the requirements of local legislation, which is also called the Facebook tax, the corporation will add 20% VAT to the cost of paid services.Therefore, business owners planning a budget for social media promotion or global search engine advertising will need to pledge an additional amount of money and pay an order of magnitude more.Google and Meta (Facebook) will start collecting value-added tax from advertisers registered in Ukraine from January 1, 2022.

New rules for buyers of Facebook ads

In addition to the above information, the letter from the tech giant Google indicates that these tariff changes apply only to those users who have the tax status Individual or Private entrepreneur. At the same time, the current prices will remain unchanged for legal entities, from which no additional actions are required.If users have any questions related to the innovation, the company advises them to contact lawyers to clarify the current situation, since it does not provide such consultations.

Price increase for Google services in Ukraine

From January next year, due to the special taxation procedure, the cost of electronic services the following services will increase:

• Google advertising;
• Instagram advertising;
• promotion on Facebook.

The question of whether the prices of all Google paid services (particularly Google Drive cloud storage, paid apps in Google Play, and YouTube Premium subscription) will change remains unanswered, as the news does not mention it.

Google and Facebook Tax Law

The reason for the announced price increase was the recently adopted Tax Law #1525-IX, which was signed in June 2021. Its initiator was Danylo Hetmantsev, head of the financial committee of the Verkhovna Rada.This document states that a special procedure for VAT taxation will be introduced for those non-resident companies that provide electronic services to persons registered on the territory of Ukraine. Such global IT companies as Facebook and Google belong to them.Non-resident companies must register in Ukraine as VAT payers under the simplified system, and then regularly pay 20% of each transaction. This condition applies to those corporations whose total number of financial transactions is more than one million hryvnias during the year.