Argentina v Amazon and Other Global Online Sellers
- Jan 30, 2014 | Gail Cole
Argentina’s economy seems to be in a free fall without a parachute. Inflation, already high, is on the rise. Salaries are inadequate. Economist Francisco Rodríguez calls the country “vulnerable,” and it is hard to find evidence to the contrary, at least in world news.
In short, Argentina needs more cash. And it has come up with an interesting way to get some.
Pick up your package at customs
Online shoppers in Argentina are like online shoppers most anywhere in the world. They visit their online store of choice, click and buy. Within days or weeks their purchases arrive on their doorsteps. Easy as eating pie.
Not any more. The BBC reports that “[i]tems imported through websites such as Amazon and eBay are no longer delivered to people’s home addresses. The parcels need to be collected from the customs office.”
This new policy is not designed to get online shoppers off their sofas, though it certainly will. Rather, it’s an attempt to collect the 50% tax due on certain online purchases. Argentinians may purchase without tax two items valued at $25 (£15) from foreign companies or abroad each year. Above and beyond that limit, foreign-originating items are subject to a 50% tax.
International travelers are familiar with the Customs Declaration cards handed out on international flights, on which travelers must enumerate purchases made while traveling abroad. In a similar vein, Argentinians now have to sign a declaration when shopping online at a foreign-owned business. That signed declaration must be shown at the customs office when the packages are collected.
Just about every time Argentines purchase something from a foreign country, they’ll have to figure a trip to customs into their shopping time. Given the reported wait times, they may as well travel to a foreign land to shop.
Why didn’t states think of that?
It’s a wonder states haven’t thought of this. In the United States, use tax is due on taxable purchases when sales tax isn’t paid at the time of purchase. If it’s getting increasingly difficult for individuals to plead ignorance about use tax, it isn’t get much easier for states to collect it. Individual taxpayers are supposed to voluntarily pay the use tax they owe to their state department of revenue; however, enforcement is a challenge and compliance with use tax laws is relatively low.
Do you sell globally? How does your business handle tax?