Panama: Strengthen Penalties Against Evaders

The law that criminalizes tax evasion was approved by the National Assembly when the amount defrauded in a fiscal period of one year is equal to or greater than $300.000.

Wednesday, January 30, 2019

With a majority vote, Project 591, which criminalizes tax evasion in the Criminal Code and is considered a crime resulting from money laundering, was approved in the third debate, informed the Legislative Assembly.

"The project establishes in article 288 G that anyone who, for personal benefit or the benefit of a third party and with the intention of committing tax fraud against the National Treasury, affects the correct tax determination to stop paying all or part of those taxes, shall be punished with a prison sentence of two to four years."

The institution specified that the penalty provided in this article will only be applicable when the amount defrauded in a fiscal period of one year is equal to or greater than $300,000 dollars, without including fines, surcharges and interest in the calculation of the amount. If it is less, the competence will pass to the tax administrative sphere.

The Ministry of Economy and Finance explained in a statement that "... this law punishes the great evader who harms the Treasury by intentionally defrauding for more than 300,000 balboas, this being a taxpayer with taxable income of more than 1.25 million balboas per year."

The minister, Eyda Varela de Chinchilla, detailed that "... This project, presented and promoted by the Ministry of Economy and Finance, will not have an impact on most Panamanian taxpayers, as only 81 legal entities are included in this range of taxable income."

See MEF' s and Legislative Assembly's press release.

More on this topic

Pressure to Approve Tax Evasion Law

January 2019

The Panamanian government assures that if the law that criminalizes tax evasion is not approved, the country will be exposed to enter the FATF grey list again in 2019.

From the Ministry of Economy and Finance press release:

The Ministry of Economy and Finance considers that it is necessary for Panama that the National Assembly approve the law that increases tax evasion to a criminal offence and as a precedent for money laundering.

Progress in Tax Evasion Law

October 2018

The law project approved in the first debate in Panama establishes penalties of two to four years in prison for evasion of $300,000 or more and could be used as a precedent for money laundering.

The Commission of Government, Justice and Constitutional Affairs of the National Assembly, approved in the first debate the law project 591, which considers tax evasion as a crime.

Controversial Request to Reduce Penalties for Tax Evasion

October 2018

During the discussion of a tax evasion law project, the Panamanian business sector requests that the amount defrauded to be considered a legal crime be increased from $300,000 to $500,000.

Regarding the request made by the Chamber of Commerce, Industry and Agriculture of Panama, the Ministry of Economy and Finance (MEF) explained that "...

Project to Penalize Tax Evasion Moves Forward

December 2017

In Panama, the Cabinet Council has approved a bill that converts tax evasion of more than $300 thousand into a felony punishable by up to 2 to 5 years and fines of up to 10 times the amount defrauded.

From a statement issued by the Presidency of Panama:

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