New Tax Criminal Law Amendment to Be in Force

In the last but one session of the year, the Argentine Congress passed the amendment of Law No. 24,769, applicable since 1997. Among the main modifications, it is worth mentioning the actualization of minimum amounts that imply prison penalties, the inclusion in the regime of provincial taxes, and the elimination of the possibility of closing criminal trials in some cases, with the payment of the claimed tax.

In detail, the amendments are the following:

1. Updating of amounts for the existence of crime. After passing the new law, the minimum amounts that determine the existence of a crime are updated. In general, the amounts are multiplied by four, except for the case of illegal appropriation of social security taxes, which will be analyzed below. Among others, for simple evasion (two to six years of prison) the minimum amount of tax omitted rises from AR$100,000 to AR$400,000 for each fiscal year and for each tax, and for aggravated evasion (three years and a half to nine years of prison) the minimum amount rises from AR$1,000,000 to AR$4,000,000.
2. Provincial taxes. The new law includes provincial taxes and taxes of the City of Buenos Aires in the regime, for the cases of evasion, illegal use or obtaining of tax benefits, illegal appropriation of taxes, illegal tax insolvency, payment simulation and alteration of records.
3. Creation of a new aggravating factor. The new law includes as an aggravating factor of evasion, without numerical limitation, the omission of tax payment through the use of invoices or any other similar document, ideologically or materially false.
4. Creation of a new crime. The new law includes as new crime the modification or adulteration of computing systems or any electronic equipment provided or approved by the federal, provincial or the City of Buenos Aires’ tax authorities. This crime shall be punished with one to four years in prison when the behavior may cause any damage and may not derive in a more serious crime.
5. Misappropriation of taxes and social security taxes. The new law includes penalties for withholding and perception agents of provincial or the City of Buenos Aires taxes that within ten business days after the payment due date, do not file those amounts with the tax authorities; in addition minimum amounts of omitted taxes rise from monthly AR$10,000 to AR$40,000. Also, minimum amounts rise from monthly AR$10,000 to AR$20,000 for employers and other withholding and perception agents.
6. Penalties for companies. When any of the crimes included in the tax criminal law is committed with the participation or in benefit of a corporation or any other liable entity, as well as the application of penalties to those individuals involved, the corporations or legal entities shall be punished with one or more of the following: fine of two to ten times the verified debt, suspension of activities for up to five years, suspension of the right to participate in governmental activities (public bids, etc.) for up to five years, cancellation of legal capacity when it has been created for the only purpose of committing the crime, loss or suspension of any benefits and publishing of the sentence that condemns the corporation, at its cost. If necessary, the judge may order judicial intervention if the continuance of the activity must be maintained.
7. Releasing from criminal liability. The new law states that only those who regularize their tax situation by paying their taxes spontaneously shall be released from criminal liability, as long as that regularization is not made due to an inspection, observation or claim by the competent tax authority, i.e. once the authority learns of an irregularity in the payment of the taxes, the taxpayer will not have the possibility of closing the criminal action through the payment, as was the case up to now for some of the crimes.
8. Judicial competence. The new law establishes, in the case of federal taxes, that it shall be competence of the federal justice in tax criminal matters of the City of Buenos Aires, and competence of the justice in economic criminal matters shall be maintained for cases already being discussed before them. In the rest of the provinces, federal justice shall be competent. Also, provincial justice shall be competent for local taxes.
9. Probation. The law includes an amendment to the Argentine Criminal Code, eliminating, in the case of crimes included in the tax criminal law, the possibility of suspension of trial, what used to permit in some cases to avoid a sentence in exchange of the performance of community service (“probation”).

Once this law is in force, there would be a possibility of demanding the closing of any criminal trials that, in view of the new dispositions, have a more favorable treatment or not to constitute a crime, due to the applicability of the principle of the most beneficial criminal law (article 2 of the Criminal Code).