2018 tax moratorium

Finally, after months of waiting – Law 49 of September 11, 2018 was passed – introducing the 2018 tax moratorium.  This has been “in the works” for about six months, but debates have been taking place in the public sector regarding which taxes and penalties would be exempted.

The suspension of interest and penalties is exclusive to those covered in this law.

• Real estate / property taxes – no interest or surcharges on tax payments received by the 31st of December, 2018.

  • If you owe any real estate taxes and need to get up to date, this would be the moment to do so – taking full advantage of the fact that there will be no penalty and interest due.
  • Previously, we have been able to do this THROUGH the online system – simply paying the taxes owed, without interest or surcharges.
  • For more information on getting up to date on your property taxes, please contact Gabriela.

• Real estate taxes, where the client is in the process of updating their property appraisal values.

  • In this case, the tax payer has up to six months to get up to date with the new taxes due for new appraised values.
  • No interest or penalties will be owed.

• Extinction of property taxes – for special cases of those taxes which are owed PRIOR to 2004.

  • In 2004, properties valued UNDER $30,000 were subject to property taxes, and then as of 2004 were exempted.
  • This exemption of tax – extinction of the debt – only applies to the balance of taxes owed before 2004.  But the tax payer should request and make sure that this extinction has taken place

• Penalties on Government fees – corporations & foundations

  • If you owe Government fees, penalties and/or reinstatement fees for your Panamanian corporation or foundation
  • You have until December 31, 2018 to get the company/foundation into good standing
  • In this case, no penalties or reinstatement charges apply

• Social Security Department

  • This drafting is a little less clear and we are investigating how it applies
  • Part one is those self-employed and employees that have outstanding amounts owed – suspension of interest for payments until December 31, 2018
  • Part two is about employers that owe social security UNTIL March 31, 2018 – who will then have to pay the FULL amount owed – to get the exemption from penalties, interest and charges.  However, it is not specific on a date until which you can organise this.
  • Nothing seems to be said about employers that have balances owed from AFTER March 31, 2018.
  • Once we have investigated this aspect, we will provide more information.