The Government of Panama has enacted Law 161 dated 1 September 2020 (“the Law”) which add provisional paragraphs to the Fiscal Code granting a Tax Amnesty due to the emergency arisen from COVID-19. One of the benefits of the Law is the extension of payment, without penalty, until 31 December 2020 of the Annual Franchise Tax for Panama Companies (SA), Limited Liabilities Companies (SRL) and any other form of companies, including Private Interest Foundations that must have been paid by 15 July 2020. The Law also grant other tax benefits/incentives as follow:
10% discount over the total amount payable by all taxpayers whose gross income does not exceed the amount of two millions five hundred thousand dollars ($2,500,000.00), as long as payment is made within a 3 months’ period followed to the approval of the Law and for taxes that must have been paid between 20 March 2020 through 31 July 2020.
Taxes subject to the 10% discount benefit are:
Income tax with exception of the income tax withheld to employees and non-residents;
Business License;
Complementary Tax;
Property Tax.
The Law also grants the possibility to those taxpayers who have already paid the above taxes prior to the introduction of the Law to get a tax credit, and the possibility to enter into a payment arrangement agreement with incentive rates reducing interests, surcharges and penalties. Please contact us should you need to pay the annual fees to your Panama company, or need any other information on this topic. We shall be happy to serve you!
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