LONDON: Meta will from July 1 impose location-based surcharges on advertisers targeting audiences in six European countries, a move that will directly affect Arab businesses that run campaigns across the continent.
The US tech giant announced it will add fees ranging from 2 to 5 percent on image and video ads delivered on its platforms, including Facebook, Instagram and WhatsApp, to offset digital service taxes imposed by individual governments.
Crucially, the charges are determined by where the audience is located, not where the advertiser is based.
That means Saudi, Emirati, Egyptian or other Arab companies paying to reach consumers in the UK, France or Italy will face the additional costs regardless of their own country’s tax arrangements with Meta.
Fees will apply at 2 percent for ads reaching UK audiences, 3 percent for France, Italy and Spain, and 5 percent for Austria and Turkiye.
“If you deliver $100 in ads to Italy, where there is a 3% location fee, you will be charged $100 (ad delivery), plus $3 (location fee), for $103 total,” the company wrote in an email to an advertiser initially reported by Bloomberg. “Note that any applicable VAT will be calculated on top of the total amount.”
The taxes have been introduced at different points, starting with France in 2019, though not the EU as a bloc.
Many tech companies report substantial sales in Europe and millions of users but pay minimal tax on profits. The goal is to claw back locally derived economic value, Bloomberg reported.
The move follows similar decisions by Google and Amazon, which have also begun passing European digital tax costs on to advertisers.
For Arab brands with growing European footprints, particularly in fashion, travel, hospitality and media, the new fees add another layer of cost to campaigns already subject to currency and targeting complexities.
Digital services taxes, levied as a percentage of revenues earned by major tech platforms in individual countries, have drawn criticism from Washington, which argues they unfairly target US companies.
Meta has been reached for comments.
