Panama Announces COVID-19 Tax Reliefs

06/04/2020

Panama has announced a broad range of supports for taxpayers, in response to the COVID-19 pandemic.

These include an extension to payment deadlines, which allows taxpayers 120 days from March 20, 2020, to settle their liability for taxes administered by the General Directorate of Revenue, including direct and indirect federal taxes, fees, and special contributions. Certain other taxes, including payroll withholding taxes, are excluded from the arrangement. The terms of the concession are set out in Articles 1, 4, and 5, of Decree 251 of 2020.

This Decree also extends the 2019 corporate tax and 2019 individual income tax return filing deadlines to May 30, 2020.

Companies may reduce their advance payments of income tax and pay in two installments, rather than the usual three, in September and December.

Certain reports that should have been filed by February 29 may be submitted until June 30, 2020, without penalties and interest, subject to conditions, set out in Law 134 of 2020.

The ongoing amnesty has been extended to June 30, 2020, with a 85 percent waiver of interest and penalties for individuals and companies who make a full disclosure and pay at least 25 percent of the tax due immediately and the full balance by December 31, 2020.

Finally, the Government is intending to roll out a wider range of e-services to encourage social distancing, and various tax enforcement-related compliance deadlines have been suspended during the current state of emergency, via Resolution 201-2353 of 2020, published in the Official Gazette on March 25, 2020.

Source: Pride Partners International