From July 1st, 2026, Meta will no longer cover the costs of Digital Services Taxes. Instead, location-based fees will apply to video and image-led digital ads shown in Austria, France, Italy, Spain, Türkiye, and the United Kingdom.
Crucially, the advertiser’s location does not matter. Even if your business is based in the U.S. or elsewhere, you’ll still incur DST fees if your ads are delivered in any of these markets.
Rather than increasing spend to offset these costs, advertisers can absorb Meta’s new DST fees by improving efficiency. This is primarily achieved through tighter audience segmentation, creative optimization, and smarter budget allocation. Below, we break down how to reduce waste and maintain performance despite the added cost.
If you’re a U.S.-based advertiser running Meta campaigns internationally, DST fees apply based on where your ads are delivered, not where your business is located.
For example, ads shown in the United Kingdom will incur a 2% location-based DST fee, even if your ad account and company are based in the U.S. While this is the lowest DST rate among the affected markets, it still has a real impact on planning, forecasting, and efficiency targets.
To calculate the effective media budget available after DST in a 2% market:
Example (U.S. advertiser spending into a 2% DST market):
This illustrates how DST doesn’t change your campaign budget inside Meta Ads Manager, but it does reduce the amount of budget that actually goes toward ad delivery.
DST provides a timely reason to audit performance. Shift budget away from campaigns delivering the weakest cost-per-result and reallocate toward those driving the strongest returns.
In many accounts, this rebalancing alone can recover the lost efficiency.
If you’re running identical objectives across multiple campaigns, now is the time to consolidate.
Using Campaign Budget Optimization (CBO) allows Meta’s algorithm to allocate spend where performance is strongest, though this should be closely monitored. Keep testing campaigns separate to maintain control and insight.
Scaling creative volume is one of the fastest ways to offset rising costs.
Whether repurposing historically strong assets (where still relevant) or iterating on current formats, aim to increase the number of creatives entering the account ahead of July. Track top performers to inform future consolidation.
If you’re still serving ads to users who converted in the past 90 days, it’s time to clean house.
Exclude recent purchasers using the Meta Pixel or, ideally, secure first-party data uploads. This ensures prospecting budgets are focused on acquiring new customers, not re-serving ads unnecessarily.
Test manual CPC bidding or target cost-per-result strategies to find the right balance between control and scale.
The goal is to protect efficiency while maintaining delivery—especially critical when platform-level costs increase.
In simple terms, if you’re a U.S. business running Meta ads into a market with a 2% DST fee, you need to make one of the following adjustments to stay performance‑neutral:
This same principle applies across all DST‑affected countries. The only difference is the percentage. Markets with a 3% or 5% DST simply require proportionally greater efficiency gains or cost offsets to maintain the same results.
| Market | DST Fee | Monthly Budget | New Monthly Budget | Target CPA | New Target CPA |
|---|---|---|---|---|---|
| United Kingdom | 2% | $50,000 | $49,019.61 | $50.00 | $49.02 |
| France | 3% | $50,000 | $48,543.69 | $50.00 | $48.55 |
| Italy | 3% | $50,000 | $48,543.69 | $50.00 | $48.55 |
| Spain | 3% | $50,000 | $48,543.69 | $50.00 | $48.55 |
| Austria | 5% | $50,000 | $47,619.05 | $50.00 | $47.62 |
| Türkiye | 5% | $50,000 | $47,619.05 | $50.00 | $47.62 |
Aron Jheeta, Senior Paid Social Account DirectorWhilst the implementation of DST is huge, it offers a chance for all of us to reflect and refine our approach to Paid Social advertising on Meta. Reviewing your strategy with a fine-tooth comb will remove wastage, double down on performance and drive efficiency.
For many, it will be more of the same as budget is increased unnecessarily to offset the rising costs. Others will decrease budget and accept a minor loss of performance without making the right decisions for conversion efficiency – persisting with an ad structure that has inefficiencies.
Meta’s DST fees are a fixed cost increase but they don’t require higher budgets. Advertisers who prioritize efficiency across media strategy, creative execution, and conversion performance can absorb the 2–5% uplift without sacrificing results.
At Dig & Dig, our Paid Media specialists help growth-focused brands navigate platform changes with clarity and confidence. If you want to understand how DST will impact your Meta performance and what to do next, we’re here to help. Get in touch today at hello@diganddig.com to speak to our team of specialists.
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Senior Paid Social Account Director
Aron is a Senior Account Director, leading Dig & Dig’s Paid Social department. He has over nine years of experience creating, managing, and implementing Paid Social strategies for B2B and D2C clients in a wide range of sectors. During his career, he has delivered results across a suite of Social Media platforms, including Meta, TikTok, Linkedin, Snapchat, X and Pinterest.
