New Value-added Tax on External Digital Services to be Implemented by End of March

https://tn.com.ar/economia/habra-que-pagar-iva-por-netflix-spotify-y-otras-plataformas-digitales-partir-de-este-mes_854297

Argentina’s Federal Administration for Public Revenues (AFIP) has prepared the regulations needed to begin charging a value-added tax to foreign digital platforms and services such as Netflix and Spotify. The head of the treasury, Alberto Abad, commented yesterday (before submitting his resignation), that by the end of the month the regulations would be actualized and AFIP would be authorized to receive these taxes. Abad told journalists who informed TN.com.ar that the measure has already been sent to the Pink House (the equivalent to the U.S.’s White House) and that steps towards implementation are under way. A tax reform passed by Congress in 2017 empowers AFIP to charge value-added taxes to digital service platforms; according to the law, the tax on purchases will be applied to those services based in countries outside of Argentina whose use or profit occurs within the country.

Included in the list of proposed services affected are “the access and/or downloading of images, text, information, video, music” and games, including gambling games. To clarify further, the law includes downloading films and other audiovisual content to devices which are connected to the Internet, the downloading of online games, including those that connect multiple players remotely, music, movies, or any digital content acquired through streaming, obtaining mobile ringtones and music, viewing online news, blogs, and website statistics, and finally accessing weather and traffic (even through satellite services).

AFIP’s value-added tax will be set at 21% meaning that for every 100 pesos consumers pay to a digital service company, they will be charged an additional 21 pesos. If companies do not lower their prices to absorb the tax, consumers will have to pay more for these services previously mentioned. The article states that there were more than 500,000 subscribers to Netflix in Argentina in 2016, and adds that other streaming platforms affected will include HBO Go, Fox, Apple and Amazon TV, Spotify, and Airbnb.

The biggest problem AFIP faces is how to collect the taxes charged on services provided in Argentina but that are based in another country. Their plan is for credit card issuers to act as withholding agents in that these issuers will receive the tax the consumers pay for the service and will then turn it over to AFIP.

I obtained this article from my audiovisual news source, Todo Noticas, although this particular news story was presented as text rather than video. Todos Noticias is owned by Grupo Clarín, the largest media company in Argentina, who claims to provide honest, accurate, and comprehensive information. The information presented in the article seems to accurately outline of what types of digital content the value-added tax will affect; it reliably provides evidence for the services that will be covered by including quotes from the tax reform law passed in 2017. The article also uses a couple quotes from the head of the Argentinian treasury to state when the tax will take effect, which is reliable in terms of presenting information from the official directly involved with the issue, but in terms of the reliability of implementing the tax by his quoted date of the end of March may or may not prove reliable depending on how quickly AFIP acts. Overall, the article presents a neutral perspective. It provides the details of the tax, recognizes a challenge that AFIP faces in implementation, and provides a rough number of Argentinians who use Netflix (however, there is no cited source for this statistic) and therefore will be affected by the tax without using any charged vocabulary or favoring any side of the issue to introduce a notable source of bias. Although the article could have provided more information about the users of the other digital services affected, I expect more information to become available in the future after AFIP begins to apply the tax.

Works Cited (Image came from the article):

Rafele, Esteban. “Habrá Que Pagar IVA Por Netflix, Spotify y Otras Plataformas Digitales a Partir De Este Mes.” Todo Noticias, 3 Mar. 2018, tn.com.ar/economia/habra-que-pagar-iva-por-netflix-spotify-y-otras-plataformas-digitales-partir-de-este-mes_854297.