Panama Approves Tax Evasion as a Crime: Law 70 of January 31st, 2019
Panama enacted the Law 70 of 2019, where the Tax Evasion is considered a crime by adding said dispositions to Criminal Code and modifying the Tax Code. This new law brings Panama to a new level of compliance under International Law, as it was one of the few countries in the world where the tax evasion was not considered a crime.
New tax evasion rules:
When is the tax evasion considered a crime?
Whenever someone intentionally evades taxes, for himself or for a third party, for the amount of USD 300,000.00 or above in a calendar year, by hiding, omitting, falsifying or deceiving the tax office.
What are the sanctions for this crime category?
The penalty of prison from 2 to 5 years and a fee of 2 to 10 times the amount evaded.
Exceptions to the penalty?
If the evaded tax amount with the fees are paid in full without conditions, the penalty of prison will be voided.
How is the tax evasion crime accusation formalized?
When the tax office has information that in a calendar year an amount of USD 300,000.00 or above has been evaded, they will notify the Tributary Administrative Court about the events with the appropriate evidence, who has the faculty to file a criminal case through the prosecutor’s office.
The approval of this Law was largely celebrated by the local business associations and the bank regulator, amongst all government agencies, as it fulfills the minimum requirements and dispositions established by Financial Action Task Force (FATF) for the country to keep its international investment category rate, along with the multiple benefits that it creates.