On May 27, 2020, Executive Decree No. 298 was approved, amending, and adding provisions to Executive Decree No. 251 of March 24, 2020, which adopted tax measures to alleviate the economic impact of the State of Emergency decreed in Panama as a result of COVID-19.

The following modifications and additions are of special interest:

Extension of terms

• During term of the State of National Emergency, and until July 17, 2020, is granted for the payment of taxes under the jurisdiction of the General Revenue Directorate (DGI), without this entailing the generation and payment of interest, surcharges, and fines.

  Taxes subject to this benefit include direct and indirect national taxes, fees, special contributions, and any other liquid and enforceable monetary debts that a natural or legal person may have to pay to the DGI, except of:

1. Income Tax withheld from employees
2. Income Tax withheld from non-residents
3. I.T.B.M.S. held for non-residents
4. I.T.B.M.S. retained by the State
5. I.T.B.M.S. held by local retention agents
6. Dividend tax

• Property Tax: A deadline of July 17, 2020, is granted for the payment of this tax withheld by the banks, corresponding to the first quarter of the 2020 fiscal period.
• Sworn Income Tax Returns: The period is extended until July 17, 2020, for the presentation of the returns corresponding to the 2019 fiscal period by natural or legal persons.

  Those taxpayers who have already filed their income tax returns for the 2019 tax period, may file a corrective return until July 17, 2020, at no cost and without losing the possibility of rectifying or extending the return. This will be allowed, to give the taxpayer, the opportunity to take advantage of the benefit established in Article 3 of the Executive Decree No. 251 3, which indicates that for the year 2020, taxpayers may determine the tax to be paid, for an amount not less than 70% of the tax caused in their income tax returns for the fiscal period 2019.

• Transfer Pricing Report: The deadline is extended until September 30, 2020, for the presentation of the report concerning operations of the 2019 fiscal period, for those who have regular fiscal periods.

Electronic submission

The electronic submission of those original documents and/or authenticated copies of documents that serve as evidence or that are requirements for procedures and applications before the DGI is authorized.
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