PART ELEVEN: PENALTIES


Offenses for which no penalty is specifically provided
215. If a person is guilty of an offense against this Ordinance or against a
regulation made thereunder, and if no other penalty is specifically provided for
that offense, then he shall be liable to one year imprisonment or to a fine, or
to the fine said in section 61(a)(2) of the Penal Law 5737-1977 (in this Part:
Penal Law), or to both penalties.

Failure to notify of beginning or change of occupation
215A. (a) If a person opened a business or began to exercise a vocation and did
not inform the Assessing Officer of that fact in time and also did not
submit on time the first annual return, which he is required to submit
after the said events, then he shall be liable to three years
imprisonment or to the fine said in section 61(a)(3) of the Penal Law,
and to one and a half times the tax to which he was liable.
(b) If a person opened a business in or began to exercise a vocation in an
additional place or if he changed his place of business or the place
where he exercises his vocation and did not notify the Assessing
Officer in time and also did not submit on time the first annual return he
is required to submit after the said events, then he shall be liable to
eighteen months imprisonment or to the fine said in section 61(a)(3) of
the Penal Law, and to one and a half times the tax to which he was
liable.

Non-compliance with certain requirements, etc.
216. If a person, without sufficient cause, committed one of the following offenses,
then he shall be liable to one year imprisonment, or to the fine said in section
61(a)(2) of the Penal Law, or to both penalties:
(1) he did not comply with a demand included in a notification given to him
under this Ordinance;
(2) he did not appear, as required by a notification under this Ordinance or,
he did appear, but did not answer a question lawfully put him;
(3) he refused to accept a notification sent to him under this Ordinance;
(4) he did not submit a return under section 132 or 133 in time;
(4a) he did not submit on time a deductor's online return or an employer's 242
online return under the provisions of section 166;
(5) he did not keep account books in accordance with directions by the
Director under section 130(a);
(6) he destroyed or concealed documents of value for the assessment;
(7) he records intakes on a cash register tape, receipt vouchers, invoices,
a daily intake ledger or other documentation under the Director's
directions by virtue of section 130, and did not record there an intake
which he was obligated to record under those directions; if the intake
was not recorded by the assessee's employee or by the assessee's
representative who is not his employee, then the employee or
representative shall be accused of the offense, and the assessee shall
be accused of it, unless he proves that the offense was committed
without his knowledge and that he took all reasonable steps to ensure
its prevention;
(8) he did not report an act that constitutes tax planning that must be
reported in a return, as said in section 131(g), in violation of the
provisions of section 131(a)(5d) or (b1) or (g).

Assault or obstruction in performance of duty
216A.(a) If a person assaults a person who performs any function or is employed
in the implementation of this Ordinance, with the intent to obstruct him,
or while the aggressor is armed with a firearm or other instrument, then
he shall be liable to five years imprisonment or to the fine said in
section 61(a)(4) of the Penal Law.
(b) If a person performs any act intended to obstruct any person said in
subsection (a) in the due performance of his function shall be liable to
three years imprisonment or to the fine said in section 61(a)(3) of the
Penal Law.

Transfer of assets with intent to prevent collection of tax
216B. (a) If a person transferred his assets to another without transferring control
thereof, with the intention to prevent the collection of tax to which he is
liable or may become liable in respect of a period before the transfer or
in the year of the transfer, or in respect of a type of income the
production of which has begun but lasts several years, then he or if
the transferor is a body of persons, the person who effected the said
transfer shall be liable to two years imprisonment or to the fine said in
section 61(a)(3) of the Penal Law.
(b) If a person distributed a company's assets among its members with the
intention to prevent the collection of tax to which the company is liable
or to which it may become liable in respect of a period before the
transfer or in the year of the transfer or in respect of a type of income
the production of which has begun but lasts several years, then he shall
be liable to two years imprisonment or to the fine said in section
61(a)(3) of the Penal Law, on condition that the amount of the fine not
exceed the amount of the debt.

Unlawful representation
216C. If a person violates one of the provisions of section 236, then he shall be
liable to one year imprisonment or to the fine said in section 61(a)(4) of the
Penal Law 5737-1977, or to both penalties.

Incorrect return and information
217. If a person, without reasonable justification, makes an incorrect return by 243
omitting or understating income of which he is required to make a return
under the Ordinance, or if a person gave incorrect information in relation to
any matter or thing that affects his own liability to tax or the liability of any
other person or of a partnership, then he shall be liable to two years
imprisonment or to the fine said in section 61(a)(3) of the Penal Law, plus the
amount of income missing in consequence of that incorrect return or
information, or which would have been missing if the return or information had
been accepted as correct, or to both penalties; if the person argues that he
had reasonable justification, then he shall bear the burden of proof.

Non-deduction of tax
218. If a person did not deduct tax which he is required to deduct under sections
161, 164 or 170, or if a person received work income or income under section
2(5), knowing that tax was not deducted from it under those sections, then he
shall be liable to one year imprisonment or to the fine said in section 61(a)(2)
of the Penal Law, plus double the total of all the amounts not deducted, or to
both penalties.

Failure to transmit deducted tax
219. If tax was deducted under sections 161, 164 or 170 and without reasonable
justification it was not paid to the Assessing Officer as said in sections 161,
166 or 171, then the person required to make the deduction shall be liable to
two years imprisonment or to the fine said in section 61(a)(3) of the Penal
Law, and to double the total of all aforesaid deductions, or to both penalties; if
he argues that he had reasonable justification, then he shall bear the burden
of proof.

Fraud, etc.
220. If a person willfully commits one of the offenses specified below with the
intent to evade tax or to assist another person to evade tax, then he shall be
liable to seven years imprisonment or to the fine said in section 61(a)(4) of the
Penal Law and double the amount of income which he concealed, intended to
conceal or helped to conceal, or to both penalties; and these are the
offenses:
(1) he omitted from a return made under the Ordinance any income which
must be included in the return;
(2) he made a false statement or entry in a return under the Ordinance;
(3) he gave a false answer, verbal or written, to a question asked or to
information requested of him in under the Ordinance;
(4) he prepared or maintained or allowed another to prepare or to maintain
false account books or other false records, or he falsified or allowed
falsification of account books or records;
(5) he made use of any fraud, artifice or contrivance or allowed use of
them;
(6) he presented a false document to the person who paid the income, in
order to prevent or reduce the deduction of tax at the source.

Linkage of amount on which fine is imposed
220A. For purposes of a fine under this Part or under Part Ten, the basis of which is
an amount of income, the basis shall be increased in proportion to the
increase of the consumer price index, from the index last published before
the end of the tax year to which that basis relates, to the index last published
before the fine is imposed.
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Payment of fine or of composition imposed on another person
220B. A body of persons shall not pay, directly or indirectly, any fine or composition
imposed on another person in respect of an offense under sections 215 to
220; whoever violates the provision of this section shall be liable to a fine
three times the amount of the fine or composition paid; for this purpose:
"body of persons" exclusive of a body of persons, the members of which
must place their full working capacity at its disposal and who must transfer
their assets to it.

Monetary composition
221. If a person committed an offense under sections 215 to 220, the Director may
with that person's consent accept from him monetary composition that
does not exceed double the highest fine that can be imposed for that offense,
and when he has done so, any legal proceeding against that person in
respect of that offense shall be discontinued, and if he was under arrest for it
he shall be released.
Burden of proof
222. (a) If a person is charged with an offense under section 216(4), then he
bears the burden of proof that he does not have to deliver a return.
(b) If a person is charged with an offense under section 216(6), then he
bears the burden of proof that the documents he destroyed or
concealed are of no value for the assessment.
(c) If a person, to whom the provisions of section 161, 164 or 170 apply, is
charged with an offense under sections 218 or 219, then he bears the
burden of proof that he has complied with the said provisions.

Presumption of guilt
223. If a person is charged with the offense of omitting or understating income
under section 217, then his guilt shall be deemed to have been established
prima facie, if one of the following has been proven:
(1) domestic or other personal expenditures incurred in the tax year
exceeded the income of which a return was made to the Assessing
Officer;
(2) his capital or the capital of his spouse or of their children under age 20
increased during a certain period of not more than five years by an
amount greater than the amount of the income of which the spouses or
one of them made a return or returns for that period to the Assessing
Officer, less tax that was paid.

Responsibility of a person who helps to prepare return
224. If a person helps another person to prepare any return, notification or other
document for the purposes of this Ordinance, knowing that that return, notice
or document contains incorrect information, or if a person appears as the
representative of an assessee and gives information for the purposes of this
Ordinance, knowing that it is incorrect, then he shall for the purposes of
sections 215 to 217 and 220 be deemed to have committed the said acts.

Responsibility of director, etc.
224A. If a body of persons committed an offense under sections 215 to 220, then
every person who was an active director or a partner, accountant, responsible
officer, trustee or representative of that body when the offense was
committed, shall also be deemed guilty thereof, unless he proves one of
these
(1) that the offense was committed without his knowledge; 245
(2) that he took all reasonable steps to ensure prevention of the offense.

Prescription
225. A criminal action under this Ordinance shall not be brought later than six
years or in the case of an offense against the provisions of section 220, ten
years after the tax year in which the offense was committed.

Penal proceedings do not exempt from payment of tax
226. The opening of proceedings for the imposition of a penalty, fine or
imprisonment under the Ordinance or their imposition thereunder does not
relieve any person of the obligation to pay tax to which he is or may be liable.

Investigations and searches
227. The Minister of Police may authorize an Assessing Officer to carry out
investigations or searches in order to prevent or to detect offenses against
this Ordinance, and an Assessing Officer authorized as aforesaid may
(1) exercise every power vested in an police officer of the rank of inspector
or above under section 2 of the Criminal Law Procedure (Evidence)
Ordinance and sections 3 and 4 of the said Ordinance shall apply to a
statement taken by him as aforesaid;
(2) exercise the powers of a policeman under section 17(1)(a) of the
Criminal Law Procedure (Arrest and Searches) Ordinance, except for
the power to seize property other than documents;
(3) (a) exercise the power of an officer in charge, within its meaning in
section 9 of the Criminal Law Procedure (Arrest and Searches)
Ordinance [New Version] 5729-1969, release a person on bail,
and sections 10 to 15 of the said Ordinance shall apply to this
matter;
(b) if a suspect was released on bail under subparagraph (a) and no
indictment was brought against him within 180 days after his
release, then he and his guarantors shall be released from their
bail, and the provisions of section 55(b) of the Criminal Law
Procedure Law [Consolidated Version] 5742-1982 shall apply to
this matter.

Saving of other Laws
228. The provisions of this Ordinance shall not affect any criminal proceeding
under another Law.

Publication of list of offenders
228A. Once a year the Director may publish a list of all assessees convicted in the
preceding year, by final judgment, of an offense under section 220; the said
publication shall be in at least two daily newspapers.