International Financial Legal Review 2019 (ILFR1000)
05/09/2019
Horizontal Property and the Amendments to the Real Property Tax
04/10/2019Law No. 52 of 2016 has been regulated by Executive Decree No. 258 of September 13 th , 2018. The scope of the law had been clearly established by this regulation, which states that legal persons who do not perform acts of commerce in Panama, must keep their Accounting Records and submit them to the General Directorate of Revenues in the event that they require the same, in accordance to the activity that they perform.
Regarding the definition established by Article 2 of Law 52 regarding “Accounting Records”, a division has been made based on the activity of the legal person, i.e., the legal person that “does not perform acts of commerce” and the legal person that “performs acts of commerce.
- Only if it is an asset holder, of any kind, the accounting records must evidence the value of said assets and the income received thereof.
- Those who perform commercial activities outside the Republic of Panama, must keep a Journal and Ledger, except for those who performs activities of purchase and sale of negotiable instruments and securities. Nevertheless, they are under the obligation of providing any supporting documentation and additional information, which may be required by the competent authority.
Additionally, the Executive Decree provides that the accounting records must be prepared pursuant to the International Financial Reporting Standards (IFRS) and must be countersigned by a Certified Public Accountant of the corresponding jurisdiction where said records are prepared.
In the event that the accounting records and supporting documentation be kept outside of the Republic of Panama, and be required by the Panamanian competent authority, the same must be provided in Spanish, and if the same are not drafted in that language, the legal person shall be under the obligation to provide a translation made by a Certified Public Translator of the Republic of Panama.
The accounting records must be sent with the certification required in their country, which guarantee the printing of the information and deems admissible the accounting system used for said records.
It is worth mentioning that the Resident Agent is under the obligation to know the physical location where the accounting records are kept and to have all the contact details regarding the same. In the event that said information is required by the Tax Entity, and cannot be provided, the Resident Agent shall be under the obligation to resign as Agent.
We are at your entire disposal for any queries or clarifications you shall require,
Sincerely yours,
ICAZA, GONZALEZ-RUIZ & ALEMAN
