Panama: Hotels vs. AirBnB War Continues

Besides trying to formally regulate housing rentals used for tourism, the DGI is planning better controls on the payment of income tax and ITBMS.

Monday, March 7, 2016

The battle between hotels against vacation rentals made via platforms such as Airbnb continues, and so far the only measure taken by the government has been to collect fines of up to $50,000 and a promise to accelerate the process of imposing these sanctions. reports that "...Legal objections to Airbnb are not limited to the issue of permits required for offering tourist accommodation services, because by using this electronic platform private individuals are receiving income that is not declared to the tax authorities and, according to the Directorate General of taxes (DGI) should be taxed like any other income generated in Panama ... Publio Cortes, head of the DGI, told Capital Financiero that anyone who generates income from a Panamanian source is subject to income tax (ISR) and if you provide a service within the territory of Panama, you will also be the subject of Transfer Tax on Personal Property and Services (ITBMS by its initials in Spanish). "

"... Cortes was emphatic in warning that: "The law will be applied firmly by the DGI, regardless of how payments are made by the parties involved in the business transaction. '"

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