Facebook To Charge 6% Digital Tax On FB Ads In Malaysia

It's the second company to charge us digital tax

While this news won't affect consumers much, it will definitely affect those who do FB marketing. Starting 1 January 2020, Facebook will start charging a 6% digital tax for advertisements.

This was announced on their help page, which explained how this will affect advertisers whose "Sold To" country listed on their business or personal address is set to Malaysia. According to Facebook, the service tax is added whenever you're charged for your ads regardless of whether you're purchasing Facebook ads for business or personal purposes.

Facebook adds that if the user is paying for Facebook ads through a manual payment method, the tax is applied when the ad account is funded. As an example, let's say you were recently charged $100 because you reached your $100 billing threshold. The subtotal for the charge will be for $100 in ad costs, and then a 6% service tax will be added on top of that, so you'll pay $106.00 in total for that charge ($100 + $6 = $106).

This means that you will only be charged when you hit the billing threshold and not for every ad that you make, but rather as a total lump sum.

After Google, this makes Facebook the second company to charge a digital tax after the government has announced that they will start implementing a digital tax on online services. This will likely affect services like Netflix and Spotify, which are currently popular streaming services in Malaysia, or even game platforms like Steam and Epic Games in the future as well.

You can find out more about the digital tax in our article on it.