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PN: Criminalizes tax evasion behaviors

February, 2019

On January 31st, 2019 the President of the Republic of Panama sanctioned the Law 70 that adds Chapter number twelve "Crimes against the National Treasury" to Title number seven of the Criminal Code (the "Law"), which grants the Panama Tax Authority the faculties to investigate the tax crimes where the amount defrauded is less than Three Hundred Thousand dollars (US$300,000.00) and grants the competent authority the capacity to prosecute frauds equal or superior than Three Hundred Thousand dollars (US$300,000.00) excluding fines, surcharges and monetary interests in the calculation of the total amount within the fiscal period.

The Law establishes that the legal entities used to carry out tax evasion will be fined for up to three times the amount of the tax fraud.

Also, the Law provides the guidelines and the alternatives to reach agreements with the correspondent authority in the cases in which the amount owed to the National Treasury is paid.

On the other hand, the Law modifies the law N° 23 of the 27th of April, 2015 which takes measures to prevent money laundering, terrorist and the proliferation of weapons of mass destruction financing, creating this obligation for: (i) the financial obligated subjects, (ii) the non-financial obligated subjects; and (iii) the activities carried out by professionals subject to supervision to update the information and due diligence documentation at least once a year for those clients identified as a high risk.

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