Buenos Aires Issues a 'Netflix Tax' For All Digital Entertainment

New submitter DoILookAmused writes A few years ago, the Argentinean government implemented a 35% tax on all offshore buys using a credit card. In yesterday's press release, the city of Buenos Aires announced it will charge a 3% gross income tax for all streaming or media purchase abroad allegedly to bring it to "competitive prices with local media companies". This tax doesn't supersede the national 35% tax, which has sparked several reactions.

Comments

Oh, Argentina

[bill_mcgonigle]

For those who don't know, Argentina is on the brink of economic collapse yet again. Their occupying government has ruined the currency with wishful thinking as if it didn't just happen a decade or so ago. They've been trying to negotiate away all the bad debt they've run up and not everybody is letting them off the hook this time. Like good bureaucrats they're probably looking to tax anything that moves.

3% tax on Netflix? pfft - last time they confiscated pensions and retirement accounts. Oh, sorry, they didn't confiscate them, they replaced the negotiable cash value of them with government-backed bonds. Which rapidly fell to zero value.

FWIW, the US DoL floated an RFC on 'protecting' retirement accounts by replacing them with bonds a few years ago. Nobody should be undiversified in their retirement savings jurisdictions.

Re:Oh, Argentina

[Kjella]

For those who don't know, Argentina is on the brink of economic collapse yet again. Their occupying government has ruined the currency with wishful thinking as if it didn't just happen a decade or so ago. They've been trying to negotiate away all the bad debt they've run up and not everybody is letting them off the hook this time.

Actually, it is the old debt default from 2001 causing them to default now. In two rounds in 2005 and 2010 some 92% of their creditors agreed to cut 65% of their debt through new bonds - over a barrel, of course. The last 8% want all of it with full interest, but they're not getting anywhere in Argentinian courts. However, now they've gotten a ruling in a US court that Argentine can't pay interest on the new bonds without also paying them in full. Which Argentine can't, because part of the agreement with the other 92% is that nobody else will get a better deal so it would invalidate everything. They could make a backroom deal to make somebody else buy out the last 8% and swap for new bonds, but that's basically paying these guys off and setting a very, very bad precedent for later debt negotiations.

Instead they decided to play hardball back and just default, meaning those 8% get nothing - and neither do the 92% who agreed to new bonds. It's basically a giant game of chicken, who backs down first - Argentine because they want to get back on the international financial markets or will the last 8% figure 35% today is better than dreaming of getting their 100% + interest back forever. Argentine actually manages their finances quite well at the moment, being cut off from international credit means they've had to bring their budgets in balance and from the looks of it they can stay defaulted for quite some time.

Sad

[Nicopa]

I'm form Argentina and it saddens me that this post comments will fall among these categories:

• Peple saying "don't cry for me XXX".
• Argentines explaining that Argentina is the worst country, worse than the worst.
• Uninformed right-wing people talking about Cuba, communism.

Even the summary is wrong! That 35% is not a tax, just a pre-payment of the income tax that you can recover.

All hope is lost.