The Buenos Aires justice tribunal has backed up the city government's decision to tax all over-the-top (OTT) operators offering services in the city, the so-called Netflix tax.
The taxation will be only applicable in the city and will not work in the rest of Argentina. The city's Tribunal Superior de Justicia rejected a proposition to declare unconstitutional the tax, eliminating the last obstacle from the new regulation's way. The Netflix tax will be then applicable from February 2015 and it will drive a price increasing of nearly $0.5 per subscription.
The local tax is intended to compensate cable providers which have been largely complaining in Argentina against the unfavourable conditions to compete against OTT operators and telcos, which are now allowed to offer audiovisual services following the new Argentina Digital law.
The tax was due to start being collected from November and will retain 3% of every subscription to streaming services such as Netflix or Spotify, or other services similar to those offered by PlayStation.
Since the beginning, the decision has been criticised by Argentina's Government, which explained it's only a local tax and doesn't affect the entire country.