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LEGAL ALERT - NEW TAX BENEFITS FOR LEGAL ENTITIES REGISTERED IN PANAMA

LEGAL BASIS

Law 401 of 2023, enacted through the Official Gazette of Monday, October 9, 2023, which creates transitory measures for tax recovery and a special transitory treatment of abbreviated tax audit, management, and tax debt. You can access the law by clicking on the link provided here.

BENEFITS

1) Tax Regularization

The Law grants the following tax incentives:

  1. 25% discount of the Annual Fee applicable for the tax period 2024, to corporations and foundations that pay 100% of the corresponding amount.
  2. Discount of 25% of the Real Estate Tax applicable for the fiscal period 2024, for taxpayers who pay 100% of the annual tax.
  3. 50% remission of all fines, whether charged or not, in the e-tax 2.0 system to taxpayers who, within this term, pay the remaining 50% of the fines.
  4. Exoneration of the fines applied to taxpayers who had filed late the Form 03 (Planilla 03) for the 2022 tax period and/or the sales form for the 2022 tax period. The amounts paid by taxpayers as a result of the imposition of fines referred to herein will generate a non-transferable tax credit, which may only be offset with the same tax debt code that gave rise to the obligation.

 

2) Statute of Limitation of Official Letter for debts from 2015 or earlier

Declaration of ex officio statute of limitations of debts for tax obligations of administration of the General Directorate of Revenue that are reflected in the taxpayer’s current account that correspond to fiscal years of 2015 or previous concerning:

  • Income tax
  • Educational insurance
  • Operation notice

3) Transitional Abbreviated Inspection Procedure

This procedure involves skipping the adjustment discussion phase during an inspection and directly incorporating the technical evaluation. The abbreviated inspection applies to the following taxes:

  • Income tax
  • Educational insurance
  • Operation notice
  • ITBMS

EXPIRATION

The period to take advantage of these tax benefits ends on November 30, 2023, however, the General Directorate of Revenues has the power to extend it for an additional 30 days.

If you would like more information to take advantage of the tax benefits of this law, do not hesitate to contact your lawyer or Mr. Juan Raul Sosa (jsosa@fmm.com.pa), tax attorney of our firm.

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Juan Raúl Sosa V.

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