New legislation introduced by the Argentinian government could see offshore gaming operators subjected to a Value Added Tax (VAT) of up to 27 per cent.
The legislation imposes VAT on all offshore digital providers, including gambling operators, who offer their services in the country without paying any taxes.
Digital services that could be affected by the legislation include media streaming services, cloud-based software, e-books and mobile apps.
The draft bill does not include the exact tax rate that foreign gambling operators may face, but according to Juan Ignacio Juanena of iGaming Latam Consulting, the figure could be as much as 27 per cent.
"Should the government decide to pursue a 27 per cent tax, the impact on operators would be, without a doubt, significant," Juanena told Gaming Intelligence. "We are talking about a far higher tax rate than in regulated jurisdictions such as Colombia.
"However, it is worth stressing that this proposal has nothing to do with the regulation of online gambling in Argentina. It is only a tax imposition on offshore service suppliers,” he added.
The Senate passed the proposed measure on December 27, with president Mauricio Macri signing off on the bill just two days later.
Argentina already has high taxation rates for licensed gambling operators, with a 41.5 per cent corporate income tax rate, a 0.75 per cent tax on each bet placed, and a 2 per cent tax on every wager placed online.