Argentina simplified e-commerce platform VAT and Withholding Tax April 2023
Argentina (General Resolution No. 5319/2023) is to introduce a range of simplifications to the VAT regime for digital platforms for e-commerce. This will enable easier compliance of VAT and Withholding Tax.
The changes include:
- Raising the VAT registration threshold to:
- 120 transactions per annum; and/or
- ARS 200,000 per annum (approx. USD 1,100)
- New definitions of digital platforms to clarify who is liable to VAT or Withholding Tax
- Appointment of fiscal collection agents for Withholding Tax for platforms – there are now 20
- New compliance procedures (returns and deadlines) for Withholding Tax agents
- Confirmation of withholding VAT rates (see below)
Argentine VAT and Withholding Tax rules since 2018
Argentina brought non-resident providers of digital (or electronic) services into its Value Added Tax net in June 2018. Rather than imposing the obligation to VAT register and collect taxes, it has applied a withholding VAT requirement on payment providers processing consumer payments to overseas providers. They become the payment withholding agent based on list of foreign digital service providers. This means there is effectively no VAT registration threshold.
Check our global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.
Argentina levies VAT, or Impuesto al valor agregado (IVA), at 21%. Services provided to Argentinian businesses with a VAT registration are subject to the reverse charge. This makes the customer responsible for the VAT.
Which electronic services subject to VAT?
Argentina includes a standard listing of digital services subject to VAT, including:
- Website provision and hosting
- Streaming and download media
- Digital advertising services
- Cloud software or data storage
- Access to digital images
- Online gaming
- Gambling sites
Payment providers (banks, credit card merchants, e-wallet and similar) have become responsible for defining eligible transactions. They must withhold VAT at the full standard rate, currently 21%. The list of digital service providers is controlled by the tax office, AFIP. Providers are liable to remit, on a monthly basis, any VAT collected via the SICORE payments system.
The latest calculations are as follows:
- 1% if the provider or seller if VAT registered
- 3% rising to 7% for VAT-registered providers or sellers with poor compliance record
- 7% for sellers or providers who are registered under the simplified procedure but then exceed the threshold.
- 8% for all other sellers or providers.
Central and South America VAT on digital services
|Comments (click for details)||Rate||Date||Threshold||Comments|
|Bahamas||10%||Jan 2015||BSD 100,000|
|Barbados||17.5%||Dec 2019||BBD 200,000|
|Costa Rica||13%||Oct 2020||Nil||Withholding VAT option|
|Dominican Republic||18%||2023||Nil||Currently withholding VAT|
|El Salvador||13%||2022||-||Replace Withholding VAT|
|Paraguay||10%||Jan-21||Nil||Withholding VAT; 4.5% DST|
|Puerto Rico||10.5%||Jan 2020||$100,000; or 200 transactions||Marketplaces|
|Suriname||10%||Jan 2023||SRD 500,000|
|Uruguay||22%||Jan 2018||Nil||VAT and Withholding Tax|