Tax Measures due to the COVID-19 State of Emergency
The Ministry of Economy and Finance
has promulgated Executive Decree No.251 of March 24, 2020, by which
extraordinary tax measures are adopted in order to alleviate the economic
impact that has occurred due to the State of Emergency in which the nation is
These measures are:
A term of 120 calendar days (counted from the date of promulgation of Law No. 134 of March 17, 2020) is granted for the payment of taxes that must be paid during said period; and that are payable Panama’s Tax Authority, without this leading to the generation and payment of interest, surcharges and fines.
Exceptions are established to the
term for the payment of taxes whose obligation arises from the quality of
withholding agents, which we detail below.
Income Tax withheld from employees
Income Tax withheld from non-residents
Value Added Tax withheld from non-residents
Value Added Tax withheld by the State
Value Added Tax withheld by local withholding agents
Property Tax withheld by Banks
Extension until May 30th, 2020 as a definitive term, for
the presentation of the affidavit of income corresponding to the 2019 fiscal
period of natural or legal persons. Eventually eliminating by virtue of the
State of Emergency the extension of the period of one month for the presentation
of the affidavit of income established in paragraph 5 of article 710 of the Tax
Taxpayers are given the facility to digitally present all
original documents and / or authenticated copies as other documents that serve
as evidence or requirements for procedures and applications before the Panama
Tax Authority. This action will be carried out through the procedures that this
entity establishes, including the request for the Non-application of the
Alternate Calculation of Income Tax (CAIR) in accordance with the provisions of
The Director of this entity during the term of the 120
calendar days, will be able to issue countersigned Good-standing certificates to
taxpayers who present delinquency or inconsistencies in their current account,
as long as they present at their office the corresponding request duly
motivated and supported in accordance to the procedures established in this
Decree. In this same way, during the
same term, the presentation of good-standing certificates from Panama’s Tax
Authrity and the Social Security Fund is exempt for all procedures carried out
at these institutions.
Taxpayers may determine for year 2020 the estimated tax according to their affidavit of income, which may total an amount that is not less than 70% of the tax caused in their tax returns for 2019 fiscal period, and this tax that must be paid in two periods during fiscal year 2020.
a. Deadline for payment of the first period: September 30th, 2020
b. Deadline for payment of the second period: December 31st, 2020
Panama Tax Authority is is authorized, by means of a duly motivated and sustained resolution, to postpone the terms of presentation of the different tax compliance declarations and reports; without this entailing the generation and payment of fines.
All those taxpayers who maintain processes for administrative tax evasion or criminal tax fraud will not be subject to the benefits established in this Decree.