Federal Tax Authority General Resolution 4240/18 was published in the Official Gazette on 14 May 2018 (the Resolution). The Resolution regulates the payment mechanism for the application of VAT to the provision of cross-border digital services, completing the initial guidelines set by Decree 354/18 (the Decree).
As a result of the tax reform introduced by Law No. 27,430, VAT is now applicable to digital services that are rendered by foreign residents to Argentine end customers.
I. Decree 354/18
The Decree established that payment of VAT applicable to the provision of cross-border digital services is in charge of the end customer, whether VAT is paid directly or by means of a collection agent. As a result of this, there are two potential scenarios for payment purposes:
(i) if there is an intermediary with residence or domicile in Argentina involved on the payment process, the intermediary will act as a collection agent. The Decree also established that the collection agent is required to collect the VAT if such collection agent intervenes in the payment of a transaction with a foreign provider of digital services included in a list to be created by the Federal Tax Authority (FTA).
The Resolution has published a list of entities that are considered as foreign providers of digital services, which is hereby attached as Annex A and B. In the case of Annex B, the intermediary has to act as a collection agent if the end customers are not VAT registered and the value of the operation is below USD10 or its equivalent in other currency.
(ii) If there is not an intermediary with residence or domicile in Argentina, or this intermediary does not have an obligation to act as a collection agent, the Resolution establishes that the end customer will have to pay the VAT until the last day of the month where the payment to the foreign provider was made, by means of an electronic payment through the FTA website.
II. Resolution 4240/18
II.a. Payments made using credit cards, debit cards or payment processors
The Resolution regulates different payment scenarios:
(i) If the payment is made using a credit or purchase card, the tax collection has to be made on the date of the payment of the credit card statement, even when the outstanding balance is not paid in full.
(ii) If the payment is made using a debit or prepaid card, the tax collection will have to be made on the debit date.
(iii) If the payment is made using a payment processor (eg, Mercadopago, PayU, Todopago, etc.), the tax collection will have to be made when funds are received by the payment processor for the payment of the digital service.
II.b. Payment mechanism
Under the terms of the Resolution, the collected funds have to be remitted to the FTA electronically, on a monthly basis, using the existing payment mechanism for the remission of withheld funds (SICORE).
III. Entrance into force
The Resolution will enter into force 30 business days after its publication on the Official Gazette.
To see the annex with the list of entities that are considered as foreign providers of digital services, click here.