Interactive
Argentina – Argentina hikes tax rate on online gambling
By Phil - 6 June 2022
The government headed by President Alberto Fernández has ordered an increase on the tax rate on online betting according to a decree 293/2022 published in the Official Gazette last week.
Established in December 2016, through Law N° 27346 The Indirect Tax on Online Betting imposes taxes on the online gambling sector, establishing a federal online gambling tax of 2 per cent rate on the gross value of each bet. The tax was established throughout the country and applies to bets and/or games of chance made in the country through any type of digital platform. The law also gave the Executive branch the right to increase the tax rate by as much as 50 per cent, reduce it or temporarily leave it without effect.
In October 2020 Minister of Economy, Martín Guzmán, added provisions to the 2021 Budget to increase the federal tax on online gambling from 2 per cent to 5 per cent of the gross value of each transaction. Then in 2021 the government created a new Online Control Registry of Betting in order to cover taxation over the industry further.
According to the new plans 95 per cent of the amount collected by the government through this tax would be shared with the provinces, and 5 per cent would finance Argentine government- owned telecommunications (ARSAT). It was one of the 40 modifications implemented in the Budget Committee of the Chamber of Deputies. The tax is designed to help pay off some of the country’s deficit.
In the decree published last week “Given the complexities of taxing online gambling and betting, a dynamic regulation is necessary”
The new tax ranges from 2.5 per cent to 15 per cent depending on a number of factors with operators facing heavier rates for having not complied with previous regulations. Meanwhile those companies that are already registered with the online gambling registry and have put local employees on the books will benefit from a lower rate.
Subjects residing in Argentina and already registered in the Online Control Registry of the Betting System will pay 5 per cent.
If these companies prove to have a one-time invested capital of more than AR$200 million as of the fiscal year closed on January 1, 2021, and increased by 20 per cent the number of registered employees since then (with a minimum of 20 employees, or 30 if they register based on the new regulations) will pay 2.5 per cent.
An organizing entity resident in Argentina without being previously registered will pay 7.5 per cent.
In the case of non resident: 10 per cent; and if the foreign subject is not registered in the registry or is located in “non-cooperative” or “low or no tax” jurisdictions will pay 15 per cent.
Interactive gambling is regulated at a provincial level and there is currently no federal gambling legislation when it comes to online gambling. However a number of Argentine provinces are looking at new regulations to allow for online gambling. The government will levy the tax on all payments related to online gambling sites targeting the country by checking bank records.
