Argentina – New VAT Withholding Requirements for Digital Platforms 

The Argentinian Government has decided to adjust the tax rules that govern the VAT withholding framework for digital platform operators. This regulatory framework defines the conditions under which platform operators should withhold VAT from payments/fees that their users (e-commerce merchants or service providers) receive from customers. 

The new General Resolution imposes more stringent rules on digital service providers that operate through digital platforms. Under new requirements, the scope of service providers who provide their services only through the platform’s facilitation will be significantly expanded. 

Simply put, the new Regulatory instrument “asks” platform operators to withhold VAT on a significantly broader scope of service providers. The central provision of the new Resolution is to tax more individuals(who aren’t VAT registered) who provide their services through sharing apps(primarily transportation ones) 

Key Changes and Impact 

A less vague definition of what counts as a habitual activity conducted by service providers operating through digital platforms 

The resolution defines that any person who offers services through digital platforms may be considered an “uncategorized subject” if they meet the habitual activity criteria.

The habitual activity threshold, which later on triggers the VAT imposition, is met under the following conditions:

• Ten or more services are provided during a month 
• Their monthly threshold is above app. EUR 440 
• And they offer a digital service

Most of the drivers who operate through ride-sharing platforms reach this threshold. 

Focus 

The principal focus of “tightened” regulatory measures is to generate more tax revenue for the Revenue Administration from both the public administration and business sides, and to create a more level playing field with other regulated taxi drivers.