Withholding tax and Google Ads

On Saturday I reported in detail on the issue of withholding tax on Google Ads / Adwords. Although I was aware that the topic is hotter than perhaps many suspect and that the topic should be known to almost no one, the amount of reactions then surprised me.

Since the topic has generated a number of inquiries from new clients, I have discussed the topic with a number of colleagues, and the current view is that there is definitely a need for action. The issue should not be underestimated.

The reason is clear.

As mentioned above, a tax audit can cover a longer period of time and therefore also affect larger advertising sums. Moreover, such topics are very convenient for tax auditors. A liability notice is issued quickly and, in case of doubt, enforced even faster. On the other hand, defending yourself against the liability notice can be expensive and lengthy. Outcome: difficult to predict.

After numerous conversations, I can therefore only absolutely advise to take advantage of a consultation on the subject to see what might be necessary steps. As a minimum, provisions for possible claims must be made.

In any case, it can be fatal to ignore the issue. This applies in particular to companies that may book advertising FOR others with Google and in the worst case (depending on how the contracts with the customers or the payment flows look) are left sitting on a loss for an action that has not even brought them their own business advantage. If necessary, offers/contracts/legal relationships should be adjusted here or own customers informed.

Author: Marian Härtel

Marian Härtel ist Rechtsanwalt und Fachanwalt für IT-Recht mit einer über 25-jährigen Erfahrung als Unternehmer und Berater in den Bereichen Games, E-Sport, Blockchain, SaaS und Künstliche Intelligenz. Seine Beratungsschwerpunkte umfassen neben dem IT-Recht insbesondere das Urheberrecht, Medienrecht sowie Wettbewerbsrecht. Er betreut schwerpunktmäßig Start-ups, Agenturen und Influencer, die er in strategischen Fragen, komplexen Vertragsangelegenheiten sowie bei Investitionsprojekten begleitet. Dabei zeichnet sich seine Beratung durch einen interdisziplinären Ansatz aus, der juristische Expertise und langjährige unternehmerische Erfahrung miteinander verbindet. Ziel seiner Tätigkeit ist stets, Mandanten praxisorientierte Lösungen anzubieten und rechtlich fundierte Unterstützung bei der Umsetzung innovativer Geschäftsmodelle zu gewährleisten.