How to settle the costs of advertising on Facebook and Google AdWords?


The saying that advertising is the leverage of trade no longer comes as a surprise to anyone. Currently, not only PR specialists and marketers are aware of the importance of promotion for the company - also entrepreneurs themselves see and appreciate the value of good advertising, looking for better and better (and at the same time not too expensive) ways to promote their business. In the era of the Internet entering practically every area of ​​human life, the web is an extremely important tool in this matter, which cannot - and certainly - should not be omitted. Therefore, it is worth learning how to settle costs related to advertising using the two most popular methods - Google AdWords and Facebook.

The Google AdWords platform is designed to promote their goods or services by users with the help of advertisements that appear in the search engine after entering specific keywords. On the other hand, Facebook offers its clients the creation of the so-called fanpages - special profiles that allow you to attract fans. A big advantage of such Facebook promotion is the so-called viral marketing - when one of the users likes the entrepreneur's website, this fact is noted and visible to all subscribing friends.

What about the costs and taxes of the entrepreneur?

The purchase of an advertising service intended to promote your own business is an expense that can certainly be considered a tax deductible cost. Using the provisions of the PIT Act, it can certainly be concluded that advertising is used to obtain a new source of income. That is why an entrepreneur can enter expenses for Google AdWords or a fanpage on Facebook to the tax book of revenues as other expenses related to business activity - column 13.

Here, however, you should consider what date will be appropriate for the settlement and - most importantly - on the basis of which document should such an expense be recorded? Google issues invoices to its contractors - and more specifically e-invoices in PDF format, available to the user in his individual account. Similar documents are available from Facebook Ireland Limited. Such an accounting voucher should be downloaded by the entrepreneur and stored in an electronic format - of course, if all formal requirements are met - or printed and placed in a paper version in the company's documentation. The cost of advertising must be booked in the ledger according to the invoice date.

At first glance, VAT settlements may seem a bit more problematic. Fortunately, it is actually not difficult. The invoice received from Google or Facebook does not contain the amount of VAT tax, but there is an annotation that the tax on goods and services is settled by the recipient, in accordance with art. 196 of the EU Council Directive 2006/112 / EC. How should this be interpreted? Well, the services sold by Google AdWords and Facebook can be treated as advertising or electronic services - and since both Google and Facebook are headquartered in Ireland, the Polish taxpayer should settle such expenses as ordinary import of services. Therefore, in such a situation, a general rule should be adopted stating that the place where the tax on goods and services is calculated is the place of business of the recipient.

Therefore, VAT should be charged by the Polish entrepreneur in accordance with the national rate specified on the invoice received. Due to the fact that when purchasing goods and services, the taxpayer has the right to deduct the input VAT, most often such a transaction is entered in both the VAT register of purchase and sale, becoming tax-neutral.

Importantly, a taxpayer using Google AdWords services or Facebook advertising must register as an active taxpayer for value added tax in the EU, although he does not have to submit VAT-EU information. The VAT accounted for the import of services is shown in the appropriate columns of the classic VAT-7 (or VAT-7K) declaration.

Google AdWords and non-corporate costs

Google AdWords advertising is used not only by entrepreneurs. It is often used also when someone is involved in renting or private sales. Also in this case, advertising expenses are tax-deductible.

For such transactions, the invoice issued by Google is not as important as it is for the entrepreneur. While the latter books costs on the basis of an invoice, a private seller or lessor must first pay the amount due for the service. Only in such a situation, having an undisputed proof of payment, can the expenditure be considered a tax deductible cost.