Tax Amnesty: Law Sanctioned in Panama

President Laurentino Cortizo sanctioned Law 208 of April 6, 2021, which extends until December 31 of this year the validity of the tax amnesty, which initially arose in 2019.

Thursday, April 8, 2021

With this initiative of the Executive, enacted in Official Gazette and which is part of the Economic Recovery Plan (phase 1), taxpayers will have until August 31, 2021 to make payments or enter into payment arrangements with respect to tax obligations not fulfilled until January 31 of this year, official sources informed.

Check out the "System for monitoring markets and economic situation in Central American countries", prepared by CentralAmericaData.

According to a press release from the Presidency, the legislation establishes that all those tax obligations not fulfilled since January 31, 2021 and prior dates may be settled and take advantage of the extension of the tax amnesty, saving 85% in interest, surcharges and fines.

The law grants individuals and legal entities the opportunity to resubmit documents that should have been endorsed until January 31, 2021 and grants them the remission of 75% of the corresponding fine, provided that they pay the remaining 25% before December 31, 2021, the document states.

According to the authorities, "... the regulation dictates new tax relief measures, mainly in the area of real estate, extending the 10% discount on real estate tax until the end of April, plus an additional benefit of 5% discount for individuals and legal entities that have income lower than B/.2.5 million and that pay income tax and estimated tax with respect to the fiscal period 2020 and 2021, correspondingly, within the four months following the entry into force of this proposed law."
 
The extension of the tax amnesty has a social ingredient, in addition to the economic one, since, as a result of the Covid-19 pandemic, thousands of Panamanians have been affected not only in their health, but also in the economy of their homes as a result of the closing of companies and suspended contracts, as well as the definitive separation from their jobs, concludes the information released.

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