An initiative by the Ministry of Economy aims to return to withholding agents money spent on implementing the new ITBMS payment systems.
The implementation of technology dealing with the Tax on the Transfer of Movable Property and the Provision of Services (ITBMS) has entailed a cost for companies which make annual purchases equal to or more than $10 million.
The arrangement involves withholding a portion of the tax on the transfer of movable goods and services, and is mandatory for companies that accept payments using credit and debit cards.
Despite the private sector's proposal in December to postpone it until June 2016 , the entry into force of the obligation to retain 50% by way of Transfer Tax on Goods and Services (ITBMS), the Directorate General of Revenue (DGI), informed taxpayers that new withholding mechanisms for the tax on Transfer of Goods and Services (ITBMS), will come into effect from 1 February 2016, including retention by companies that handle credit and debit cards.
Once again the private sector has asked the government to postpone the deadline, this time until June 2016, for the entry into force of the obligation to retain 50% of the Transfer Tax of Goods and Services (ITBMS by its initials in Spanish).
This is the second time that the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) has asked the government to postpone the measure, this time arguing that the number of transactions managed by companies that must adhere to the new standard is very high and makes implementing the changes needed for create a retention system very difficult.
A postponement has been made until January 1, 2016 of the entry into force of the measure which requires companies with annual purchases of goods and services worth over $10 million to retain 50% of the tax on transfer of movable property and services.
After the business sector asked for more time to implement the necessary changes to start withholding the tax, the Ministry of Finance decided to postpone entry into force of the measure until January 1.
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