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Friday, May 24 2019 @ 01:47 PM UTC

New Panama Legislature Enacts Tax Moratorium

Money MattersPanama City, Panama, August 19, 2009 --( The new Panama administration of President Ricardo Martinelli has taken its first major tax initiative by enacting Law 45 of 2009 whereby a moratorium is granted for payment of national taxes collected by Directorate General of Revenue ( Under the law, taxpayers are exempt from paying surcharges, interest and fines on unpaid taxes due by June 30, 2009, if they pay at least 30% of said taxes and agree to pay the rest before September 1 within a period of 6 months. Tax payment plans signed after September 1 but before December 31 still would qualify for a exemption of fines and 75% discounts on surcharges and/or interest. Such a tax plan would benefit owners of corporations and private interest foundations formed in Panama who must pay a US$300 annual tax called "Tasa Unica". While Panama corporations and private interest foundations doing business outside of Panama do not have to pay Panama income tax, they still have to pay the US$300 annual tax. Article 318A of the Tax Code also imposes a US$50 fine for every annual tax paid late and a US$300 surcharge after 2 years of delay in payments. Article 3 of the 2001 Supreme Court of Justice Schedule for Legal Services further provides every year for a US$250 Resident Agent Fee and a US$150 nominee director fee. Lombardi Aguilar & Garcia ( partner Alvaro Aguilar Alfú finds the moratorium to be useful for investors using Panama entities. "Even if the names of corporate shareholders and private foundation beneficiaries are disclosed to their resident agents under privacy rules, changes in the charter and board of directors must be registered with the public registry. Local laws require that all annual tax payments be up to date when filing said changes, so the moratorium would allow owners of these entities to save on the fines and surcharges which would otherwise have to be paid after 2010," said Aguilar. The moratorium also covers property taxes due for ownership of real estate at rates of up to 2.1% of the registered value. "Unlike other countries, Panama authorities do not mail or deliver tax statements so property taxes - along with surcharges, fines and interest - may be accumulating without the owner knowing," Aguilar points out. "Many foreign buyers have purchased real estate in Panama, either directly or by purchasing shares of landholding companies or foundations, so this is a good time to ask the local Panama tax office for a statement to pay taxes due without fines and ask counsel in their country of origin about other tax compliance and filing requirements".
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