Argentina’s Federal Administration of Public Revenues introduced a VAT of 21 percent on digital services from non-resident entities in June 2018. This policy change has shifted tax compliance from payment processors to foreign service providers as of September 2024, impacting U.S. companies and benefiting Chinese competitors in the digital market.

In June 2018, Argentina implemented a 21 percent value-added tax (VAT) on digital services from non-resident providers. This tax includes services such as streaming, software downloads, online advertising, and cloud computing. Initially, payment processors were responsible for withholding the tax; however, effective September 1, 2024, this requirement ceased, shifting compliance responsibilities to foreign service providers.

Argentina’s new VAT policy on digital services places additional burdens on U.S. technology companies while offering advantages to Chinese firms, potentially reshaping the competitive landscape in Latin America’s digital market. U.S. companies must now navigate complex tax obligations, while Chinese entities may find increased opportunities for expansion.

Original Source: itif.org

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