Google AdSense and AdMob - how to settle income?

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An increasing number of people use the Internet platform Google AdSense - a program used to place advertisements in various forms on websites to generate income. In addition, a new platform has recently been added to the Google product family - AdMob, which allows you to generate profits through advertising in mobile applications.

Revenues obtained from cooperation with Google AdSense and Google AdMob can be considered - in accordance with the position developed by the tax authorities - in two ways: as income from non-agricultural business activities or as income from other sources.

Ad revenue as revenue from other sources

People who run their own websites only in the hobby field, or create an application for smartphones from time to time and establish cooperation with Google AdSense or Google AdMob, do not have to set up a business. Possible profits will be considered here as income from another source. As a hobby, designing a larger number of websites or applications may be considered a source of income for the taxpayer, and therefore the taxpayer will be required to establish a non-agricultural business. In unclear situations, therefore, it is worth asking for an individual interpretation. The primary currency in which billing with Google is made is Euro. If the profits are transferred directly to the PLN account, the conversion to the Polish currency is made by the bank itself. Otherwise - e.g. a foreign currency account or a check - you need to convert euros to zlotys yourself, using the exchange rate from the day before the day of receipt of income. People who will cooperate with Google AdSense or Google AdMob and will earn profits in the form of other revenues do not have to pay monthly income tax advances. Ad revenue should then be included when generating the annual tax return.

Although the income from Google is included in the PIT declaration in one amount, it should be remembered that they must be added up in the Polish currency. This means that each individual income must be individually converted into PLN.

Income from Google AdSense and non-agricultural economic activity

If the taxpayer conducts non-agricultural business activity and cooperates with advertising platforms as part of it, the income obtained thanks to this activity will be included in the income from economic activity.

Ad revenue is paid when you reach a certain revenue threshold. Once the taxpayer receives the receipt, they will be required to issue an invoice or bill to Google. If it happens that throughout the year the profits do not exceed the required amount, the accounting documents must be issued on December 31. Otherwise, the date of the last day of the month in which the specific accounting period ended should be used.

Active VAT taxpayers always document their income from Google with an invoice. If it happens that the entrepreneur has not carried out intra-Community transactions before, remember to report to the tax office in order to obtain VAT-EU (taxpayer's NIP number with the prefix PL). In the periods when the taxpayer receives income from Google (or performs other intra-community transactions), you must also submit a VAT-EU declaration to the office. Importantly, the revenues obtained from cooperation with Google are actually VAT neutral for the entrepreneur - they are provided in Ireland, which, according to the regulations, means that it is in Ireland that they are subject to taxation. Therefore, the VAT rate “not subject to the EU” should be indicated on the invoice of the Polish taxpayer.

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Taxpayers who take advantage of the subject exemption from VAT also register for VAT-EU and issue bills for the service. Bills and invoices remain in the entrepreneur's documentation - Google does not require its contractors to send such documents. Revenues should be included in the book of revenues and expenses always with the date of issuing the invoice or bill. As in the case of persons who obtain other revenues, also in this case entrepreneurs must remember to convert the amounts of revenues into Polish currency, using the exchange rates from the day before obtaining income.

Importantly, Google AdSense and Google AdMob are classified as advertising services. Therefore, they cannot be settled as part of activities taxed on the basis of a registered flat rate - if the flat-rate person decides to cooperate with Google in this area, they will automatically lose the right to the flat rate.