Q:
Do I need to pay withholding tax for digital advertising fee?
If I did not make payment for withholding tax, is the advertising fee tax deductible?
A:
If you are paying the digital advertising fee to a non-resident for the usage of an application, then the digital advertising fee is subject to withholding tax because it is deemed as a royalty payment.
If the withholding tax is not remitted to the Inland Revenue Board, then the digital advertising fee will become not tax deductible.
Q:
If I use digital advertisement to promote my business and I outsource it to an advertising agency to help my company to manage the advertisement, they have charged my company a retainer fee, is the fee tax deductible?
A:
If they are managing your advertisement and this advertisement is helping to promote your business which is in the production of gross income, then the fee is tax deductible.
Wishing you plentiful tax savings!
Zen Chow
YYC Tax Guru
P.S. I've received a lot of tax questions, so now I am answering the frequently asked questions and sharing them with you weekly!
P.P.S. One more thing. I have a FREE Tax Livestream that you won't want to miss out. Because you can learn how to SAVE TAX for business! Reserve your FREE seat here: bit.ly/zen-taxlive