India Plans to Scrap 6% Online Ads Tax to Ease U.S. Trade Tensions

The Indian government has proposed abolishing the 6% equalisation levy, often called the "Google tax," on online advertisements starting April 1, 2025. This tax, introduced in 2016, targeted non-resident digital companies like Google and Meta, requiring them to pay a levy on revenues generated from Indian advertisers. The move is part of amendments to the Finance Bill, 2025, and is seen as a step to ease trade tensions with the United States, which had criticized the tax as discriminatory against U.S. tech companies.

The decision comes amidst ongoing trade negotiations between India and the U.S., with the aim of fostering better bilateral relations. The removal of this tax is expected to reduce advertising costs for Indian businesses, particularly benefiting startups and small enterprises. It also signals India's intent to create a more favorable tax environment and address concerns raised by partner nations.

The levy had been criticized by the U.S. as discriminatory against American tech companies like Google and Meta. Its removal is seen as a diplomatic measure to ease trade tensions and prevent reciprocal tariffs.

Eliminating the levy reduces costs for digital advertisers and platforms, fostering a more favorable business environment.

The move aligns India with global efforts to establish uniform tax rules, replacing unilateral measures like the equalisation levy.

The Indian government aims to streamline income tax legislation and align with global tax norms, particularly those proposed by the OECD (Organisation for Economic Co-operation and Development), an international organization established in 1961 that works to promote policies that improve the economic and social well-being of people worldwide.

The OECD provides a platform for governments to collaborate, share experiences, and seek solutions to common challenges. Its key focus areas include economic growth, education, employment, trade, and tax policies. The organization has 38 member countries, primarily high-income economies, and its headquarters is located in Paris, France. The OECD also plays a significant role in setting international standards and fostering global cooperation on issues like tax transparency, environmental sustainability, and digital transformation.

The abolition of the 6% equalisation levy is expected to have several positive impacts on India's digital economy.

The removal of the levy will reduce costs for businesses advertising on platforms like Google and Meta. This is particularly beneficial for startups and small enterprises, making digital advertising more accessible and cost-effective.

With reduced costs, businesses are likely to increase their spending on digital advertisements, further fueling the growth of India's digital advertising market, which is already expanding rapidly.

Besides, the move is also seen as a step to create a more favorable environment for global tech companies, potentially attracting more investment and innovation in India's digital ecosystem.

While benefiting international platforms, the move may also push local digital advertising agencies to innovate and offer more competitive services.

Google AdSense To Update Restriction Policy for Online Gambling Content Outside Allowed Countries

Starting in March 2025, Google will update its Publisher Restrictions for online gambling content. This update will ensure that the restrictions apply not only to users within the allowed countries but also to users located outside of these countries. This means that online gambling content will be restricted from being shown to users in regions where it is not permitted, regardless of where the content originates.

In an email to AdSense publishers, Google said that it will update the Google Publisher Restriction for Online gambling such that the restriction will apply when online gambling content is shown to users located outside of the allowed countries. The allowed countries are Australia, Brazil, Canada, Colombia, France, Germany, Greece, Ireland, Italy, Japan, Mexico, Netherlands, Philippines, South Korea, Spain, Turkey, United Kingdom and the United States.

The updated Google AdSense policy on online gambling content, effective March 2025, will have several potential impacts on advertisers that fall under online gambling, discussing some most possible ones below:

Advertisers promoting online gambling will face a reduced audience, as their ads will be restricted from being shown to users in regions where gambling is not permitted.

Further, Advertisers will need to invest more in ensuring compliance with the new regulations, including obtaining necessary certifications and adhering to stricter targeting guidelines.

Furthermore, Advertisers will need to focus more on targeting their ads to regions where online gambling is legal, which may require more sophisticated targeting strategies and potentially higher costs.

Besides, online gambling-related advertisers will need to be more vigilant about their brand reputation, as non-compliance with the new policy could lead to penalties and damage to their brand image.

Overall, while the policy aims to promote responsible advertising and compliance with local laws, it will require advertisers to adapt their strategies and potentially incur additional costs to ensure compliance.

How VDO.AI is Building the Future of Internet Advertising

VDO.AI’s proprietary technology platform provides the video player, video streaming, video content and video advertising in an end-to-end offering to some of the biggest publishers on the internet.

Advertising technologies are undergoing a transformation. VDO.AI is the technology innovator in digital video. The company which derives its name, VDO.AI from its raison d’etre- the integration of video content with advanced targeting capabilities, has already reached over 300 million people across the world. VDO.AI is different to its competitors as it offers a product built by a publisher for a publisher. Video being the dominant form of content consumption on the internet, the VDO.AI platform helps publishers transition to the future. VDO.AI’s proprietary technology platform provides the video player, video streaming, video content and video advertising in an end-to-end offering to some of the biggest publishers on the internet.

VDO.AI is at a mission to keep the internet free of cost for the users and help keep information free on the internet. Company’s vision is to be one of the leading global companies in its area of expertise. It is already out there with Google and Facebook as a part of their industry working its way to the top.

VDO.AI is a privately owned entity, with an annual turnover of double-digit millions and has been growing at an exponential growth rate of 500% year-on-year since inception. It is a fully bootstrapped start-up with millions of dollars invested in building the product and setting up a team of close to 100 people globally.

Currently, the company has over a thousand customers on the publishers’ site and works with many leading brands both in the Silicon Valley and India, including Airbnb, Uber, Netflix to name a few.

VDO.AI partners with all top media publishers in India like India TV, The Hindu, Dainik Bhaskar, Dainik Jagran even the international biggies like Entrepreneur.com and many more.

The company aims to integrate the best advertisers with qualified publishers, to enable a thriving high value video advertising ecosystem. By 2025, VDO.AI aims to be an established global video advertising solution provider with presence all across the globe. Currently, they are based in two cities - New Delhi and California, and intend to expand the sales offices to all the major ad tech hubs in the world covering Barcelona and Europe, New York and the East Coast of United States, Tokyo in Japan and is looking to expand in Chinese market as well.
About VDO.AI

VDO.AI is a video advertising platform which helps web publishers access the power of video content and advertising, boosting their monetization by upto 50%. The platform enables the advertisers to make targeted advertising, thereby getting more value for their money spent. The platform was founded by Amitt Sharma and Arjit Sachdeva under the aegis of Z1 Media in 2017. The company has offices in India and California.

~ BusinessWire India