Striking off: Panamanian Corporations

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Striking off: Panamanian Corporations

Wednesday, October 4th, the Ministry of Economy & Finance (read: Tax Department) published in the Gazette 174-page list of companies which have been struck off the register.  This striking off is done in accordance with Article 318-A, subsections 2, 3 & 4 of the Tax Code.  Article 318-A of the Tax Code deals with the payment of annual renewal fees (franchise tax) for corporations, foundations & LLCs.

This is the third such list it has published this week. The first was published on Monday. A second on Tuesday, and a fourth list was published today, just before I published this article! I almost missed that list. It’s an amazing 40,000 companies that are not in good standing. It’s estimated that these companies owe some $36 Million in government fees alone.

Effects of striking off:

Subsection 2 of Article 318-A establishes that failure to pay this annual renewal fee for 3 years consecutively results in striking off. Subsection 3 establishes the following effects of being struck off:

  • blocked from initiating legal action, doing business transactions or transfering assets;
  • unable to make claims or exercise rights;
  • blocked from filing corporate changes of any type.

Nonetheless, if your corporation is struck off, you may do the following:

  • request reactivation (paying an additional $1,000.00 penalty fee for reactivation);
  • defend any legal process begun against the company;
  • continue with any legal processes which started before striking off.

Automatic dissolution after striking off:

It is important to note that you only have a 2-year period after it is struck off to reactivate it, otherwise striking off leads to automatic dissolution at the Public Registry.  Consequently, the company will be considered to be wound up.  This means that any company that is in arrears for 5 years or more, is automatically dissolved (previously this was a 10-year period).

The lists of companies can be found in the following gazettes:

What do you need to do?

If you a corporation that owns property or has assets of any kind, and you have not been paying the annual renewal fees, then you have 2 years to reactive the company if it is on these lists. You need to pay all outstanding government fees and the $1,000 reinstatement fee (and registered agents and directors fees, if applicable). Otherwise, in 2 years from now, the Public Registry will dissolve the company automatically.

This is the first time any such list has been published since the amendment was introduced in 2016. Therefore, it contains companies that have not paid for five or even seven years, and not just those who owe 3 years in fees. This is the moment to bring your Panamanian corporation back into good standing if you are actually using it or you need it.

 

Finally, if you have any questions regarding your Panama Corporation and striking off, please do not hesitate to contact our office.  Our staff would be happy to assist you.

Bill 509: 2017 – Panama Property Tax changes

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Bill 509: 2017 – Panama Property Tax changes

For about a year now, Panama has debated decentralized government. It will use property taxes to assist local city councils in this endeavour. Resistance to change has been very vocal, especially as scaremongering occurred: You will lose your homes. If you fail to pay your property taxes, your home will be taken from you. This is just another measure of expropriation. At the end of August, Bill 509 was sent back to first debate for re-drafting after a public outcry. It went through a lengthy second debate. Last night, Bill 509 was approved by the legislature in its third debate. It now awaits signing into law by the President, Juan Carlos Varela. We expect it to be sanctioned by the President and published, as there is no pressure for veto or further debate.

Bill 509 – 2017

The principal debate centered on an article removing the tax exemptions enjoyed by Free Trade Zones. “Free Trade Zones” refers to Processing Zones, Baru, Colon FTZ, and Panama Pacifico. Most of the Chambers of Commerce in Panama objected to modifying their tax treatment. They alleged it is important to have legal certainty for foreign investors. Although these changes were forward looking, they modify all of the special laws which had established these Free Zones. A key concern is investment: private investors in infrastructure will be scared away if changes are made. The Free Trade Zones have been hit hard in recent years by other economic factors, some of which have decimated sectors of the business.

Property Taxes:

primary residence, family home, Bill 509, Panama property taxes, property tax, real estate, property purchase, land tax, tax exemptions, Panama lawyers, Panama real estate lawyersFor home owners, however, Bill 509 promises a large reduction in property taxes. In some cases, a reduction down to 0%. For most, the reduction will be 75%, and for some of the higher valued properties, only a 50% reduction.  As it stands, Bill 509 establishes the following tax rates for primary family residences:

  • 0% for homes valued under $120,000.00
  • 0.5% for homes valued between $120,000 and $700,000
  • 0.7% for homes valued over $700,000.00

These new tax rates apply as of January 1, 2019. This is because before that date, property owners must present to the Tax Department their affidavits regarding this being their “primary residence” or “family home”, to establish it as the residence that receives these new rates.

However, a property owner with more than one property, will be eligible for these new tax rates only on their primary residence. The following rates apply to weekend or holiday homes, investment, rental, commercial or industrial properties:

  • 0% – less than $30,000 (this stays the same)
  • 0.6% for properties valued between $30,000 to $250,000
  • 0.8% fo properties valued between $250,000 to $500,000
  • 1.0% for properties valued over $500,000.00

Even for properties in the highest bracket, this is a reduction from the highest existing tax rate on properties of 2.1%.

Bill 509: improved collections

One of the changes that Bill 509 introduces that will assist with collections is that it appoints banks & mortgage financing companies as tax collectors. This does not apply to first time home buyers, but does apply for all other purchasers. Banks will add the property taxes due to the monthly fees, interest and principal calculated and will include the tax in the monthly payments. The bank will then remit the property taxes to the respective tax office.

Bill 509 also establishes that there will be no appraisals carried out on property values until 2024, allowing 5 years at current property values. Nevertheless, I would expect that after 2024, there is a general move by the tax department to get updated appraisals on all properties for the purpose of collections.

Good news: Moratorium

For anyone that owes property taxes, the good news is that there is a moratorium until December 31, 2017 to get up to date. This moratorium ensures that you only pay the actual taxes that you owe – they are writing off the interest and penalties if you pay all of the property taxes that are owed. For some property owners, this will be thousands of dollars in savings.

Gray & Co. will provide an update once the law has been sanctioned & published. We are also available to assist clients in getting up to date with the payment of their property taxes, taking full advantage of the moratorium that is being offered.

In 2018, our office will be available to assist clients in registering their primary residence under this new law in order to take advantage of the new tax rates.

Property taxes – Panama Real Estate

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Property taxes – Panama Real Estate

Property Taxes: Types

When you are thinking about retiring, the last thing you want to deal with are the details. But the devil is in the details, and one of the details you need to clearly understand is property taxes in Panama.  There are a number of property taxes in Panama, but the principal ones that you need to be aware of are:

  • Annual property tax
    • land tax
    • improvements tax – or tax exemptions
  • Transfer Tax (2%)
  • Capital Gains Tax

Annual Property Taxes – Land Tax & Improvements

Whether you own an apartment or a house, you need to know what taxes are going to be charged by the Panamanian DGI (Dirección General de Ingresos) each year. We recommend that before you buy, you ask the sellers for the tax statements so that you can see the history of what they have paid each year. You should also ask what is tax exempt and when the tax exemption runs out. As I said above, the annual property tax has two parts:

  1. land tax
  2. improvements tax or tax exemption

The land tax

There is a difference between owning a condo and owning a house. The property taxes are the following:

  • Condominium: you will pay 1% of your proportional value of the land under the building.  Say the land is worth $1,000,000 and there are 84 apartments in the building: you are responsible for $11,904.76 in land value. Your 1% per annum is: $119.05.  Whatever the value of your assigned piece of the land, your tax rate will always be 1%.
  • House – land taxes: This is a little more complicated! The first $30,000.00 in value is exempt from taxes. Then the following rates apply:
    • 1.75% = $30,000 < and up to $50,000.00
    • 1,95% = $50,000 < and up to $75,000.00
    • 2.1% anything over $75,000.00
    • So, if the land value of your property is $85,000.00 you will pay: $0.00 on the value between $0.00 to $30,000.00; 1.75% on $20,000.00; 1.95% on $25,000 and 2.1% on $10,000.00. Which is about $1,050.00 per annum in property taxes.

What you need to look out for is cases, which I have seen, where the previous owner, in order to get a reduction in 2005 or so on their capital gains tax, did a property appraisal and pushed the value of the land up over $250,000.00, and at these rates, the property taxes each year are about $4,500.00! This means that you will pay in April, August & December about $1,500.00 in property taxes.

Improvements Tax or Tax Exemptions

The other part of the equation in calculating your property taxes is the tax on the improvements. There are many properties that have a 20-year tax exemption on the improvements, and so for now you only have to pay the land taxes. But the questions to consider are:

  • Are the improvements exempt?
  • If so, when the tax exemption expire?
  • What is the tax rate after the exemption expires?

So, if you purchased an apartment in a building that was built in 1996, the 20-year tax exemption would already have ended and you would need to pay property taxes on the land and the apartment itself. That is why you find so many people prefer the new buildings, even though the older buildings are much more spacious and possibly better construction (depending on the building and the year of construction).

Sale of a Property: taxes due

When you go to sell a property, there are 2 taxes which need to be paid:

  1. Land transfer tax
  2. Capital Gainst tax

Land Transfer Tax:

The land transfer tax is based on 2% of the higher of the two values:

  • the tax basis value in the DGI system
  • the sale price value

The Tax Department always wins – they will collect on the higher value!

Capital Gains Tax:

The 2nd tax payable at the time of the sale is the Capital Gains Tax:  10% of the value of the gain.

BUT… and as everyone says, when you see the word “but” just ignore everything you heard before the word: the tax department requires you to prepay an estimated 3% tax on the value of the sale to cover your capital gains tax.

  • Your purchase price: $270,000.00
  • Your sale price: $320,000.00
  • Your gain: $50,000.00
  • 10% of the gain: $5,000.00
  • 3% value of the sale: $9,600.00

At the time of the sale, you will pay the tax department $9,600.00 in Capital Gains Tax.  As you look at this, you might think “that’s unfair!”, but your only option is to ensure that your lawyer does the paperwork right and requests a refund of the overpayment of the capital gains tax! This process is some 3-4 years long – and some clients simply walk away.  The Tax Department pockets the difference.

On the other hand, if you made a large gain, there is a box that you can tick, stating that this is your “final return” on the transaction, and that is the complete amount of capital gains tax that you owe. You should review these numbers carefully with your realtor or the lawyer that is handling the closing for you.

For more information regarding your property purchase or sale in Panama, please contact Joan Villanueva in our office.

Other Property Tax issues:

There are more issues to consider regarding property taxes, such as filing your Declaration of Improvements (if you just finished building a house on a lot), presenting a request for a tax exemption (if the builder did not request the exemption from the tax department), and other similar issues, but we will deal with them in another article.

Confidentiality or Complicity of the Lawyer

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CONFIDENCIALIDAD O COMPLICIDAD EN EL EJERCICIO DE LA ABOGACÍA – Blanqueo de Capitales

Por: Judith Chiari

judithchiari2 ¿Cuál es el límite entre la confidencialidad y la complicidad, que puede tener un profesional del derecho con su cliente? Cómo ejemplo expongo la siguiente situación: Un cliente nuestro de años, al cual le brindamos nuestros servicios en todos sus negocios, se presenta a nuestro despacho y nos confía que él necesita invertir (a manera de “disfrazar”) la procedencia de un dinero proveniente de un nuevo negocio, a su entender, este no es dinero sucio pues no procede del narcotráfico, sino de otra actividad (también ilícita, a nuestro entender como profesionales del derecho).

Cómo reaccionaríamos o actuaremos ante esta situación, sabiendo que como regla de las 40 recomendaciones de la GAFI, la regla número veinte (20) versa lo siguiente:

“Si una institución financiera sospecha o tiene motivos razonables para sospechar que los fondos son producto de una actividad criminal, o están relacionados al financiamiento del terrorismo, a ésta se le debe exigir, por ley, que reporte con prontitud sus sospechas a la Unidad de Inteligencia Financiera (UIF)”

  Los análisis de muchos casos demuestran, que los blanqueadores apenas controlan un área se trasladan a otra, en este caso, nos referimos a los profesionales del derecho. Es muy importante conocer las áreas de riesgo en que se da el blanqueo, ya que  se les someten a un régimen que de ser un simple portero han pasado a ser los que tienen que alertar para decir aquí hay algo, y decírselo al estado, avisar de que hay una posible operación de blanqueo, para que a través de los órganos convenientes actúen contra esto.

Esta doble vía viene siendo por organismos internacionales, GAFI, la unión europea, INTERPOL, que avisa a que profesionales hay que seleccionar. En la década de los noventa pensaban que solo eran los bancos. Han aparecido muchos otros actores, como agentes de propiedad inmobiliaria, casas de cambios, contables, asesores financieros. Se ha visto más utilización de la profesión jurídica por parte de los blanqueadores, viendo esta profesión como un ámbito alternativo.

Una preocupación que el GAFI, ya dijo en su informe del año 92 que los abogados eran un problema pues el blanqueo de capitales  se estaba dando mediante la actividad del abogado, y que había que tomar medidas al respecto, debido a la complicidad que puede existir entre el profesional del derecho y “su cliente”.

Se da entonces la confrontación entre el derecho de secreto profesional e información del cliente y la obligación que se le impone a estos profesionales, de comunicar sobre operaciones sospechosas. Los profesionales del derecho se han visto involucrados en actos de blanqueo en los últimos años , ya sea interviniendo en la planeación diseño y realización de creación de núcleos de imputación jurídica, de nuevos sujetos, en la creación de sociedades, de estratificación de sociedades o actuando en nombre de otros, mediante fiduciarias. Un ejemplo, es el conocido caso como “Ballena Blanca”, donde se detectaron operaciones por lavado por más de 250 millones de euros, y descubrieron, conexiones de más de 1000 sociedades en varios países,  incluidos en torno a un buffet de abogados.

Y un ejemplo mucho más reciente y local lo que estamos presenciando en nuestro ámbito nacional en cuanto a centenas de sociedades creadas con el fin de canalizar fondos provenientes del peculado.

El problema no es un problema de conflicto sino de límites, los abogados, estamos enfrentando una grave situación:  pasamos de la época en que uno sabía qué recopilación utilizar, a lo de ahora, códigos actualizados de manera constante. Surge aquí la disyuntiva, de que el abogado es exigido por su cliente como un confidente que le resuelva sus problemas legales y a la vez, ese mismo abogado es exigido por las autoridades como un obligado informador de toda actividad que le parezca sospechosa de estar vinculada al lavado de activos.

Planteada la cuestión, se convierte al abogado no en una ayuda del ciudadano, sino en un “micrófono debajo de la mesa”, en un delator. Esa es la cuestión que se plantea en definir donde están los límites.

Por eso entiendo, que muy especialmente en el caso de los abogados, el secreto profesional va más allá de ser un derecho y un deber, pues existe también un deber de callar, para preservar la privacidad del cliente, tiene un significado puramente axiológico, forma parte de las bases del sistema, es un evento fundamental en el Estado de Derecho, pasa de ser un simple derecho a ser una institución jurídica objetiva, subjetiva como el derecho de cliente y derecho/deber de abogado y objetiva base fundamental de derecho de los ciudadanos que precisan asistencia.

El abogado debe ser confidente, pero lo que no debe ser es cómplice y es esto lo que trae el debate.

En la nueva ley 47 del 6 de agosto de 2013, que adopta un régimen de custodia aplicable a las acciones emitidas al portador, en el Capítulo IV , que establece la información; Artículo 10 numeral 4 versa lo siguiente:

“Proporcionar la información a que se hace referencia esta Ley cuando esta sea requerida por las autoridades competentes.  El suministro de la información no se considerará como incumplimiento de su obligación de mantener la información en estricta reserva ni como una violación al deber de confidencialidad o el derecho a la privacidad.

Los abogados incumplen cuando asisten la confesión, asesoramiento o determinados operaciones por cuenta de su cliente o bien cuando actúan representado a su cliente en toda transacción financiera.

Por lo tanto el abogado se convierte en sujeto obligado solo cuando deja de actuar como órgano necesario, cuando nos encontremos ante ese ámbito del derecho profesional donde el abogado es un profesional con el que hay que contar sin reservas; ese abogado confidente en el que hay que confiar, en el que hay que depositar toda la confianza y que además es imprescindible, porque sin él no puedo defenderme ante los tribunales.

En esos casos el abogado no es sujeto obligado, por lo tanto el abogado queda despojado de especificidad, de sus particularidades, privilegios cuando no está representando los intereses de su cliente. Tiene que identificar al cliente, examinar transacciones sospechosas, conservar documentos durante un determinado tiempo, comunicación información al servicio de instituciones en contra de blanqueo de capitales, abstenerse frente a las operaciones informadas, mantener silencio frente al cliente de que esa operación ha sido comunicada y que además ha sido paralizada, en ocasiones obviamente el cliente preguntará ¿“porque no las has ejecutado”? En este momento el abogado debe guardar silencio.Para seguir la operación y no ahuyentar a la presa.

La actitud de los abogados se debe a la importancia que para nosotros tiene la relación de confianza entre abogado-cliente y del deber de mantener el secreto profesional. Dicha relación de confianza queda enormemente deteriorada en materia de prevención de blanqueo de capitales, normativa que no sólo nos anima, sino nos obliga a mantener desde un principio una actitud beligerante y de desconfiada con respecto a las intenciones del cliente y los motivos por los que solicita nuestro asesoramiento.

Tener que investigar a nuestro cliente, desconfiar de él, efectuar averiguaciones sobre su actividad sin que lo sepa y, mucho menos, y además de esto, la idea de denunciarlo ante las autoridades por una sospecha o indicio de que los fondos que pretende invertir son de procedencia ilícita, aún sin tener certeza de dicho extremo.

A los abogados se nos imponen obligaciones de índole policial, sin poder disponer de los medios materiales necesarios para poder cumplir dichas obligaciones, como las que tienen otros sujetos obligados, como son las entidades financieras, por poner un ejemplo.

La amplitud del concepto de «blanqueo de capitales», engloba todo capital procedente de «cualquier» actividad ilícita, incluso procedente de delito fiscal, dificulta la labor de detectar a un presunto blanqueador, cuyo perfil no es el de un delincuente tradicional (traficante de armas o droga, por ejemplo), sino que puede perfectamente tratarse de un profesional aparentemente honesto y buen padre de familia, que, por ejemplo, elude el pago de sus impuestos, o es acusado en su país de origen de una quiebra fraudulenta.

El primer tipo de blanqueador es posible, entre comillas, detectarlo, el segundo, sencillamente, es difícil de ser detectado.

Debemos entonces como profesionales, conocer nuestro cliente investigar pero no por esto hostigarlo, en caso tal de tener sospecha cierta y demostrable entonces actuar cónsonamente con la legislación para prevenir quedar envueltos en el delito de blanqueo de capitales.