Argentina has officially set in place a new tax regime for online gambling. As a result, operators need to prepare to pay new indirect taxes, which could affect the benefits and bonuses players receive.
The Palace of the Argentine National Congress. The country is advancing an initiative to increase its tax revenue from online gambling. (Image: Sander Crombach Photography)
A month ago, the Executive Branch of Argentina’s government raised the rate of indirect tax on online gambling. First, however, it had to go through one more step, which the Federal Administration of Public Revenue (AFIP) has now provided.
The government approved the indirect tax on online gambling in 2016. Then, in 2020, it made changes to allow for the introduction of progressive rates. These are the rates that operators will now have to pay.
Cutting Into Revenue
The new indirect tax went live with the publication of Decree 293/2022 at the beginning of June. However, General Resolution No. 5228/2022, published yesterday in the Official Gazette, establishes the mechanisms to facilitate the payments.
In addition, the resolution establishes the deadlines and conditions for operators domiciled in the country and intermediaries acting in place of foreign platforms to make their payments.
Operators will pay the indirect tax on online gambling depending on the amount of money users deposit on their platforms. The rate is progressive, starting at 2.5% for operators domiciled in the country who have made genuine investments and reaching 15% for residents in countries with low or no taxation.
The complete breakdown is as follows:
5% for domiciled companies who have made significant investments in the country
5% for domiciled companies who have not made investments
5% for domiciled companies not in the official registry of operators
10% for foreign operators registered in the registry
15% for foreign operators not in the registry or from countries with zero or low taxation
In accordance with the legislation, national, regional and local governments will split 95% of the proceeds from the tax. The remaining 5% goes to the state-run telecommunications firm ARSAT.
Implementing the Tax Puzzle
Argentina is a huge iGaming market that has attracted well over 100 platforms. The taxes will apply to the operators of all of the platforms, with just one step remaining before full implementation.
The regulations establish that operators and intermediaries must use “441 – Online Betting” as the code for the tax when submitting tax filings. In the case of foreign operators, the tax collection agent will be the financial or banking entity that functions as an intermediary between the users and the platform that accepts the users’ deposits.
The regulations also establish the requirements for the creation and registration of the Online Control Registry of the Betting System. This database covers all licensed operators and agents and will receive quarterly updates to keep the information as recent as possible.
The data pulls information from the National Directorate of the Registry of Internet Domains and the National Communications Entity. It also relies on input from the regulatory bodies of gambling and betting in each jurisdiction.
However, until the registry is completely operational, some gaming providers will receive a discount on the tax. All tax categories are now in place, but operators in foreign countries with low or no taxation will pay just 10% for now. After the registry is live, the rate will increase to 15%.
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