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Taxpayers Note: Amendment to Tax Criminal Law


A new law published in the Official Gazette on 28 December 2011, modified certain aspects of the Argentine Tax Criminal Law. Herein below you will find a description of the most relevant modifications established by the Law. Taxand Argentina summarises the most relevant amendments established by tax criminal law.

Local taxes
The Law extended the scope of criminal penalties to crimes related to provincial taxes and taxes of the City of Buenos Aires ("Local taxes").

Legal entities
In case the crimes established by the tax criminal law are committed on behalf of, benefit or with participation of a legal entity, the legal entity is subject to severe penalties (apart from the application of the corresponding penalties to the individuals involved such as directors). Some of these penalties are: a fine of two to ten times the verified debt, total or partial suspension of the activities (for no more than five years), cancellation of the legal capacity of the company if the main purpose of the company was to commit crimes, loss or suspension of state benefits, among others.

Increase the minimum threshold for the existence of crime

The updated amounts for the existence of crime are, among others, the following (i) simple evasion: the minimum threshold is now AR$ 400,000 (approximately US$ 93,000) per tax and per fiscal year and is punished by two to six years of prison; (ii) aggravated evasion: the minimum threshold is now AR$4,000,000 (approximately US$ 930,000) and is punished by three years and six month to nine years of prison; (iii) simple evasion of social security contributions: the minimum threshold is now AR$80,000 (approximately US$ 18,000) per month, (iv) illegal appropriation of amounts withheld or collected: the minimum threshold is now AR$40,000 (approximately US$ 9,300).

Aggravated evasion

In case of evasion, the use of false invoices or equivalent document implies the qualification as "aggravated evasion".

New crime
The Law establishes a new crime which mainly consists of the modification or alteration of the computing systems provided or approved by the tax authorities. This crime is punishable with one to four years in prison.

The Law eliminates the alternative of probation for crimes included in the tax criminal law.

Spontaneous payment
If the taxpayer spontaneously pays the evaded amounts, the taxpayer will be released of criminal liability. The option of spontaneous payment will not be available if any tax audit proceeding has started.

Taxand's Take

The most relevant modifications are, among others: (i) increase of amounts for the qualification of crimes; (ii) taxes subject to the tax criminal law have been extended to provincial taxes; (iii) the liability of legal entities and the elimination of the probation. Taxpayers must take heed of the amendments and make sure that their tax structure are compliant to avoid heavy fines or even prison sentences.

Your Taxand contacts for further queries are:
Ezequiel Lipovetzky
T. +54 11 4021 2300

Lucia Peralta Krogslund
T. +54 11 4021 2300

Taxand's Take Author