Argentina confirms e-commerce Withholding VAT

Argentina has gazetted its proposed Withholding VAT on e-commerce goods and services purchased by consumers from foreign providers. It imposes a withholding of an amount equivalent to VAT where a payment provider facilitates the payment.

As well as VAT, there is an income tax withholding requirement too.

The new law requires credit and debit card holders, and wells as banks making electronic transfers, to split the VAT element when the vendor is not a taxable person in Argentina. This brings non-residents into the tax net for the best time for goods, services and electronic services.

Smaller retailers are exempted from the Withholding VAT requirement. The threshold for this is ARS 23.6million per annum over the previous three years.

This measure is effective from 19 November 2019. The rates for VAT scale from 0.5% through to 10.5% depending on the type of taxable supply. For income tax, the scale is 0.5% to 2%. Both tax payments may be offset against tax settlements at a later date.