On March 2, 2019, Law 70 of January 31, 2019 that adds articles to the Criminal Code by means of which tax evasion is described or typified as a crime in Panama, enters into force or effect.
Chapter XII is added to Title VII of the Second Book of the Penal Code to describe for the first time in our legal system tax evasion as a crime.
In this Chapter XII, articles 288-G, 288-H, 288-I and 288-J are added to essentially establish that:
a) Anyone who fraudulently obtains an enjoyment or benefit of undue tax benefits will be punished with imprisonment of 2 to 4 years and a fine of 1 to 3 times the amount of the tax defrauded.
b) The previous prison sentence shall only be applicable when the amount defrauded in a fiscal period is equal to or greater than US $ 300,000.00 not including fines, surcharges or interests.
c) When a legal entity is used or benefits from tax evasion it will be sanctioned with a fine not less than the amount defrauded nor more than double such amount.
d) The previous penalty of a legal entity will only be applicable when the amount defrauded in a fiscal period is equal to or greater than US $ 300,000.00 not including fines, surcharges or interest.
e) In the cases of this Chapter XII, the person who pays the amount of the tax liability defrauded unconditionally and totally, before the judgment of first instance, will be exempted from punishment.
f) In the event that the payment of the amount of the defrauded tax obligation is made during the investigation phase, no criminal action will be taken arising from any crime of tax evasion.
Finally, Article 254-A is added to the Criminal Code so that the new crime of tax evasion constitutes a prior o precedent crime of money laundering and a penalty of 2 to 4 years in prison is imposed on anyone who commits the crime of money laundering with funds arising from tax evasion.
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