Panama – Tax Relief Measures

On October 19^th, 2020, Executive Decree No. 522 was published, establishing regulations to Law No. 161, enacted on September 1^st, 2020.

The tax relief measures indicated by Law No. 161 shall be:

1. Extension until December 31^st, 2020, interest-free, of the Single Annual Fee applicable to corporations, limited liability entities, and any other entity, private foundations, which should have been paid on July 15^th, 2020.
2. 10% Income Tax, Supplementary Tax, and Transactions Notice, Discount that should be paid between March 20^th and July 31^st, 2020, applicable to taxpayers with gross income not exceeding Balboas 2,500,000.
3. 10% Real Estate Tax Discount on the 2020 first quarterly amount.
4. Subscription of payment plans subject to special conditions for defaulting taxpayers regarding taxes that should be paid between March 20^th and July 31^st, 2020.

This Executive Decree also addresses requirements and conditions in order to access to each of the abovementioned benefits.

Further, Executive Decree No. 522 sets forth that during the enforceability of Law No. 161, the Certificates of good standing and compliance (“Certificados de Paz y Salvo”) shall be issued to taxpayers that pay 45% of the total amount subject to payment plan subscribed according to this Decree. In the case of Real Estate assets, the certificates shall be issued but they shall not be valid for transfer or farm divisions.

This Executive Decree No. 522 is effective October 16^th, 2020.