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Andorra: Tax Crimes to Be Introduced

(Mar. 17, 2017) Andorra’s government submitted draft legislation to the General Council (the country’s parliament) on March 1, 2017, to introduce tax crimes into the Andorran Criminal Code for the first time. (Jose María Alfin, Andorra: Government Submits Draft Bill for Introducing Tax Crimes to Criminal Code, TAX NEWS SERVICE (Mar. 13, 2017), International Bureau of Fiscal Documentation (IBFD) online subscription database; Nouveau Code Pénal [New Penal Code] (Feb. 21, 2005), United Nations Office on Drugs and Crime website.)  To date, the only tax crimes in the country were established by the European Union’s Council Directive 2003/48/EC of 3 June 2003 on Taxation of Savings Income in the Form of Interest Payments. (Text as amended through 2006, IBFD.) That Directive was repealed in 2015.  (Council Directive (EU) 2015/2060 of 10 November 2015 Repealing Directive 2003/48/EC on Taxation of Savings Income in the Form of Interest Payments, 2015 O.J. (L 301) 1, EUR-LEX.)

The proposed law, which must next be discussed in the General Council, is predicted to come into force in September 2017.  It defines two types of tax offenses, lesser tax crimes and serious tax crimes.  Lesser crimes are those involving evasion of at least €50,000-worth (about US$53,200) of tax each year, for each kind of tax not paid.  Upon conviction, the perpetrator is punished with imprisonment of three months to three years, plus a fine of as much as four times the amount of tax owed.  (Alfin, supra.)

Serious crimes involve either tax payment misconduct carried out by criminal organizations or evasion of more than 150,000 (about US$159,600) per type of tax unpaid per year. The punishment for those convicted of serious tax crimes includes one to five years of imprisonment and a fine of up to four times the amount of tax owed.  Furthermore, because it is classified as a serious crime, this level of tax offense can be considered a potential element of the crime of money laundering.  (Id.)