Any willful lack of payment of taxes for an amount exceeding ARS 1.5 million per tax and per year is exposed to a criminal investigation.
Tax penalties can trigger the initiation of criminal proceedings.
The tax process and the criminal process are independent and shall be conducted separately. However, tax penalties could not trigger criminal proceedings if there is no criminal intent or the amount evaded does not exceed the threshold.
Yes, Tax Criminal Law ("TCL") provides a threshold for tax evasion/fraud offence. However, the offence also requires criminal intent and deceit.
The amount would vary depending on the facts. The TCL provides that evasion shall exceed ARS 1.5 million.
Criminal intention is required for the tax offence.
Under the TCL, the filing of an amended tax return and full payment of applicable tax owed within 30-days counted as from the date of the formal notice of the criminal complaint, shall release the company and the individuals from criminal sanctions. Please note that this benefit can be used only once per legal entity or per individual. If the company is subject to more than one criminal investigation, the benefit will be applicable to only one of the criminal cases.
The Prosecutor is entitled to initiate criminal investigations on tax fraud.
However, the Prosecutor shall request prior judge's approval to prosecute any individual or company on tax fraud offence counts.
The TCL establishes a statute of limitation of six years for simple tax offences and nine years for aggravated tax offences.
The statute of limitation would be interrupted by:
- the commission of another crime
- self defense hearing (declaración indagatoria)
- formal trial request
- summoning to trial
- guilty verdict
The statute of limitations starts to run as from the date of failure to pay taxes evaded, or the date of the voluntary filing.
Individuals:
- Penalties for individuals range from two to six years of imprisonment
- An aggravated tax offence is punishable up to nine years of imprisonment.
Companies:
- Total or partial suspension of activities, which in any case may exceed five years.
- Suspension to participate in state tenders or bids for public works or services or in any other activity related to the State, which in any case may exceed five years.
- Suspension of the legal entity, when it had been created for the only purpose of committing the crime, or when such acts constitute the main activity of the entity.
- Loss or suspension of any state benefits it may have.
- Publication of an extract of the conviction at the expense of the legal entity.
No, the TCL does not contemplate any mitigation simply because the company has a compliance or risk mitigation program.
The TCL does not provide for a self-disclosure program or procedure for tax offences.
As mentioned at 3, first and full payment of the debt shall exempt the offender from criminal liability. Please note that this benefit can be used only once per legal entity or per individual. If the company is subject to more than one criminal investigation, the benefit will be applicable to only one of the criminal cases.
Prosecuting tax offences would suspend the tax authorities' statute of limitation period.
No settlement is provided in the TCL. Other alternatives, such as probation, would be debatable but could be required provided certain terms are met (payment, restitution of damages, social work, etc.).
Both individuals and companies can be prosecuted for tax offences.
Yes, foreign employees / directors can be prosecuted.
The criminal responsibility of the individuals and companies are limited to their own actions and/or omissions.
However, in practice, should the individual be prosecuted and required to pay fines, if the individual has been granted with an Indemnity Agreement the company could pay for the fines, if any.
Yes, this is because TCL provides that if the amount of tax unpaid exceeds ARS 1.5 million, it could be subject to criminal prosecution. Please note that due to the devaluation of the Argentine peso, under the current exchange rate ARS 1.5 million would be equal to USD 7,500.