VAT on Facebook ads to provide “even footing”, says Johnson

BusinessOctober 26, 2020October 26, 2020 at 3:43 am Natario McKenzie
VAT on Facebook ads to provide “even footing”, says Johnson
In this April 18, 2017 file photo, conference workers speak in front of a demo booth at Facebook's annual F8 developer conference, in San Jose, Calif. The U.K. for the first time on Monday April 8, 2019, proposed direct regulation of social media companies, with senior executives potentially facing fines if they fail to block damaging content such as terrorist propaganda or images of child abuse. (AP Photo/Noah Berger, File)

NASSAU, BAHAMAS — Beginning November 1, Facebook ads in The Bahamas will be subject to 12 percent value-added tax (VAT).

Acting Financial Secretary Marlon Johnson yesterday said the move now puts Facebook and other online operators on “even footing” with Bahamian companies offering marketing services inside the Bahamas who have to charge the necessary VAT.

Facebook has announced the tax applies to advertisers whose “Sold To” country of their business or personal address is set to The Bahamas.

Johnson said: “By law VAT is payable on all goods and services consumed inside the country.  That includes advertising services wherever the company may be.

“This has been the case since inception. The team at the Department of Inland Revenue has been working hard to ensure it is being uniformly enforced.”

He added: “This move now puts Facebook and other online operators on even footing with Bahamian companies offering marketing services inside the Bahamas – and who have to charge the necessary VAT.

“This is standard practice for consumption taxes around the world. To get a sampling of the countries that provide similar treatment, please like countries listed on the attached.”

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About Natario McKenzie

Natario McKenzie is a senior business reporter at Eyewitness News. He has covered numerous local and international high-profile cases, including the Anna Nicole Smith death inquiry and the John Travolta extortion case. He joined the staff of Eyewitness News as a business reporter in 2019, reporting on domestic and international developments impacting The Bahamas and its business sector, with a keen focus on small business national advancement and development. In 2017, Natario was recognized by the Bahamas Press Club with two nominations for the “The Eric Wilmott Award for Investigative Journalism” and the “Social Media Award”.

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