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Argentinian Capital's 'Netflix Tax' Gets Green Light

by Mike Godfrey, Tax-News.com, Washington

26 December 2014


The Superior Court of the City of Buenos Aires has rejected an application to declare as "unconstitutional" the city's proposed "Netflix" tax, which will therefore apply to subscriber download purchases from February next year. The judges, Ana María Conde, Inés Weinberg , Alicia Ruiz, José Casás and Luis Lozano agreed in holding that the application, filed by local pressure group Unite Against Legislators lacked the required minimum legal substantiation.

The law, originally proposed last September, will be levied at three percent of the price of a subscription to such services at point of sale, and administered by credit and debit card companies. A regulation to introduce the measure was published in the city's Official Gazette.

The tax is to apply to the services of international companies such as the movie- and television program-streaming platform Netflix and the music streaming platform Spotify. It is estimated that the Buenos Aires Treasury will receive about USD2 for every payment to such as Netflix. The tax will not apply to software downloads.

President Cristina Fernández de Kirchner has called the measure unfair, since no such tax applies to cable TV users. She said that while the tax is aimed at companies, the burden will be passed on to consumers in the form of higher prices for online services.

But Argentinian residents have presumably become adept at bypassing such local barriers by using foreign card holders or issuers. Everyone has got a relation in Italy, London or Miami who will oblige. It is difficult to see that the city will succeed in such efforts to tame the Internet.

TAGS: tax | law | Italy | regulation | services

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