BUENOS AIRES — Argentina’s federal tax agency is investigating film distributors and TV broadcasters for allegedly evading $17 million in taxes on film imports including “Shrek” and “The Lord of the Rings: The Fellowship of the Ring.”
Companies allegedly declared the import value of films as DVDs rather than the contracts for broadcasting rights.
That means they paid the 50% in taxes on film imports based on a value of $10-$100 for DVDs when the real value of contracts runs from $12,000-$800,000, according to an unidentified tax authority cited by a Buenos Aires newspaper.
The tax agency declined to comment, and the Argentine Television Broadcasters Assn. (ATA), an industry group, did not return phone calls for comment.
Probe is expected to take up to two months. Once notified of an offense, companies have 10 days to make up the difference and pay fines or else lose their import rights.
The import practice has been widespread since 1995. In May, the tax agency said it would require all imported films to be accompanied by a signed contract for broadcasting rights.
Over the past two years, broadcasters have been increasingly active in film acquisitions, particularly the leaders — Telefonica’s Telefe and Grupo Clarin’s Artear-Canal 13.