Panama Tax Alert

Panama Tax Alert

Saturday, February 05 2011 @ 12:52 PM EST
Contributed by: Tom Rowley
Views: 458
Warning! Monthly fines of $1,000 will accrue for failure to file newly required monthly information returns and pay the Tesoro Nacional 1% of your monthly net revenue.
Many exPats own real estate in SAs and some of those SAs are active rental properties. If you have one then be sure to read this.

Wonder why the business community is upset with DGi and the Municipio?

Here’s one big piece of the puzzle: Law 8 of 2010 and the related Form 218 called AMIR (Adelanto Mensual del Impuesto Sobre la Renta). The filing requirements and penalties for failure to comply with this net receipts tax have many in the business community and their financial services providers concerned.

DGi has announced that every active Panamanian business must report online or by diskette EACH MONTH by the 15th of the following month, their taxable Panama-source revenue from the prior month, and then PAY 1% into the Tesoro Nacional.

An active business is ANY entity that has an Aviso de Operaciones – the capital-based tax that is 2% of your net worth determined on the annual Declaracion de Renta.

Should an active business – even if they have NO revenue – fail to submit the information online with DGi the DGi will levy a $1,000 MULTA for EACH month you fail to comply. The amount of the tax due is irrelevant.

This means that ALL SA’s that have an active business must report their January sales by 15 February with the DGi and then deposit with the BNP 1% of that revenue. DGi rules ignore the fact that your business may not be profitable, or that you may have loss carry forwards that will reduce your tax bill at the end of the year.

If you are officially exempt from paying any income taxes you are ONLY relieved from paying the 1% but you are NOT exempted from the monthly filing requirement!

Protect your assets! Be assured that these monthly filings are going to be handled by whomever it is that collects your revenue and files, for example, the ITBMS reports for your company. You have only a week or so to file the first report. Many small Panamanian accountants are happy to have the additional work — others are more realistic and recognize that many clients who are not good record keepers are in for a rude awakening. It will no longer suffice to send a pile of data once a year at year end and have someone else take care of the tax reports.

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