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This past week has seen Panama’s legislature pass, with approval of the President a Tax Amnesty until the end of the year.
Additionally, the legislature passed the law on telecommuting, which appears to still be waiting for Presidential approval. We will provide more information on that subject once we see that it has received final approval.
Tax amnesty
Law 99 (October 2019) publishes the amnesty currently in place for taxes, rates and other financial obligations owed to the Treasury of Panama. Take advantage of this getting up to date with your taxes. If you are behind on your tax obligations in Panama, you can pay without interest and penalties.
Additionally, if you have outstanding tax returns due, you can present these without paying the fine for late presentation, to get up to date in the presentation of tax returns.
It’s important to note that this amnesty only covers taxes owed up to June 30, 2019, and not any taxes which were due after that date.
Who can apply?
- Natural persons
- Companies
- Properties or property owners
What types of interests and surcharges?
- taxes (for example, income taxes, property taxes, sales taxes)
- rates (for example – government fees on corporations and foundations)
- contributions
So, if you got behind in the payment of the government fees on your corporation or foundation, you can get up to date without payment of the penalty fees.
Applications can be made in person or online through the eTax2.0 system.
Special terms & conditions of the tax break
Article 5 indicates how this will be implemented – as you have until February 29, 2020, to make full payment. Nonetheless, you should note the following:
- Payments received in October & November 2019 – 100% of all interest, penalties, and surcharges are forgiven
- If you pay in December 2019 – 95% of interest, penalties & surcharges are forgiven, which means you will need to pay 5% of the amount owed in penalties or interest
- Payment made in January 2020 – only 90% of the interest, penalties & surcharges are forgiven – you will pay 10%.
- Finally, for payments made in February 2020 – only 85% of the interest, penalties, and surcharges will be forgiven, and you will need to pay the remaining 15%.
Additionally, if you signed any type of settlement with the tax department to get up to date on your taxes, you can ask for that agreement to be rescinded. Then, sign a new settlement agreement during the months mentioned, and get forgiveness of the interest and penalties owed. You are still responsible to fulfill the terms of the new agreement, but with less interest and penalties now applied.
Social Security amnesty
There is also a moratorium until the 31st of December, 2019 to get up to date with the Social Security department on overdue employee contributions.
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