Netflix rate: MEF confirms 18% tax for digital platforms of goods and services

The Minister of Economy and Finance, José Arista, announced the approval of the law that establishes an 18% VAT tax for digital platforms of goods and services, known as the ‘Netflix Tax’. The new tax will also apply to other services, such as Airbnb.

The head of the MEF stated that “Netflix and other platforms’ services will be taxed starting today,” although it will take a few months for the measure to be adapted and for the systems in Sunat and the banking system to be modified.

“Today, the regulation was approved by which, through the banking system, for each transaction, 18% of the services they charge for the intermediation or direct provision of digital services and goods through the Internet and for intermediation through digital platforms of goods and services is deducted,” he said at a conference of the Presidency of the Council of Ministers (PCM).

Arista said that the law will be made official through a legislative decree, derived from the legislative powers granted by the Congress of the Republic a month ago.

“What we did not have until now was the mechanism for how to make these taxpayers pay these taxes, especially the VAT,” the minister stressed.

Netflix’s 18% rate will overtake Airbnb, says MEF

According to the official, there are digital services domiciled abroad that serve consumers in the domestic market without paying taxes, even though the law “says that they have to pay taxes.” The new tax scheme also affects the Airbnbdigital accommodation platform.

“On the other hand, there are other services, such as Airbnb, where the company charges both the person who provides the premises and the person who uses it. Through this system we are also charging them the VAT,” he continued.

It will not stop there, as the MEF anticipates that, thanks to this traceability achieved on new taxpayers, “SUNAT will be given the necessary information so that those people who engage in this activity on a regular basis also pay Income Tax (IR).”

“So far, there has been a very high level of evasion of income tax payments by people who are involved in Airbnb. Sunat now has a powerful tool to audit these businesses that are not contributing to the treasury,” Arista concluded.