By means of Law 99 of October 11th, 2019, a general tax amnesty for the payment of taxes administered by the General Directorate of Revenue (“DGI” by its acronym in Spanish) was approved in Panama until February 29th, 2020.
According to the supporting documents for the draft bill submitted before the National Assembly last August, the purpose of this amnesty is for taxpayers who owe taxes to the DGI to regularize their situation, so that the Treasury can recoup the sums it is owed, which are estimated to be between 200 and 250 million Dollars, as well as potentially obtaining information that may help the DGI in its supervision activities.
This amnesty applies to taxes, fees and special contributions as well as to any other liquid and payable debts a person or property may owe to the DGI, as of June 30th, 2019 which includes interest, surcharges and fines on owed taxes. It also covers late filing fines for compliance obligations as long as such filings are made by December 31st, 2019, as well as fines for contraventions which are under the DGI’s competence up to June 30th, 2019.
Taxpayers and withholding agents alike may apply to the amnesty, even if they are currently under a payment agreement or have processes for owed taxes pending; although, in the latter situation, they would first to desist from the action or recourse they have filed and is pending to be resolved. Taxpayers in administrative tax evasion or criminal tax fraud process are excluded from applying to the amnesty.
The amnesty contemplates condonation of 100% of the interest, surcharges, and fines if the payment of the owed amounts or the signing of a payment agreement takes place in the months of October and November, said condonation percentage being gradually reduced if the payment of signing of the agreement happens between December 2019 and February 2020. In order to enter into a payment agreement, 25% of the owed amount must be canceled upon signing and taxpayers will have until June 30th, 2020 to cancel the entirety of their debt.
Taxpayers may apply to the amnesty by means of a formal notification to the DGI, whether personally, through a proxy or online through the e-Tax 2.0 system.