Report from MediaPost
In Brief – Meta has announced that it will soon add a “location fee” to advertising purchases targeting users in several countries to offset the cost of national digital services taxes (DSTs). The policy will begin in May, with full billing starting July 1, and will apply to ads delivered in six markets regardless of where the advertiser is based. Fees will match each country’s DST rate: 3% in France, Italy and Spain; 5% in Austria and Turkey; and 2% in the UK. DSTs are turnover taxes applied to gross revenue, which companies say can produce very high effective tax rates if absorbed directly. In an email to advertisers, Meta explained that a $100 ad buy delivered in Italy would incur an additional $3 location fee, raising the total charge to $103 before any applicable VAT. Meta had previously absorbed the taxes while several other digital giants pass them on to customers.
Context – Back in 2020 Europe became a hotbed of efforts to increase corporate taxes paid by the largest digital companies. France led the campaign, enacting a 3% DST. President Trump aggressively opposed DSTs and used tariff threats to keep them at bay. The US-France standoff provided a model to other governments, with DST taxes enacted, tariff threats pushing off collection, and talks at the OECD pressing for a global tax deal. In time, over a dozen countries moved ahead with DSTs and Amazon, Google and Apple eventually announced tax-related fee increases. The Biden Administration did reach a global tax deal that paired dropping DSTs with a global corporate minimum tax but it was never fully implemented. Trump objected to the OECD tax agreement and quickly exited it when he returned to office. He also revived tariff threats against countries with DSTs. However, his wave of tariffs in 2025 were applied without regard to DST policies and none of the bilateral trade deals ended a DST. In mid-2025, Republicans included a so-called “Revenge Tax” in their initial budget reconciliation bill to impose a big new tax penalty on foreign investors from countries with DSTs, but the Administration eventually called for it to be dropped due to the negative impact on foreign investment in US-based assets. The DSTs aren’t going away any time soon.