Panama | New Moratorium Law

Law 401 of 2023 – Official Gazette of Monday, October 9, 2023

This Law creates transitory measures for tax recovery and a special transitory treatment of abbreviated control, management and tax debt.

 

Taxes - IgraA. Ex Officio Prescription of debts from 2015 or previous years:

Within the transitory measures of tax recovery, Law 401 establishes that the debts for tax obligations of administration of the General Directorate of Revenue (from now on DGI) that are reflected in the current account of the taxpayer corresponding to fiscal years of 2015 or previous years concerning:

  • Income Tax
  • Educational Insurance
  • Notice of Operation

 

Excluded from this benefit are:

  1. Withholding agents
  2. Debts caused by rulings issued by competent authority.
  3. Zero or loss returns filed by taxpayers in 2016 concerning the 2015 tax year.

 

Requirements to benefit from the ex officio statute of limitations:

  • Be up to date with the obligations for the years 2016 and subsequent years.
  • Not being subject to investigation for tax evasion or tax fraud.
  • Not being subject to an ongoing tax audit process or being appealed in any instance.

 

The DGI will verify each month the list of taxpayers susceptible to benefit from the application process for the ex officio statute of limitations. After this verification, within a term no longer than 5 working days, the DGI will send an e-mail to each taxpayer certifying the amount that can be ex officio prescribed. It will be necessary to keep the e-mail address registered in the DGI’s e-tax system up to date.

The DGI may ex officio decree a statute of limitations on debts that maintain appeals in an administrative (e.g. DGI) or jurisdictional (e.g. courts) venue. Such appeals will be declared non-existent because the tax obligation has been extinguished.

 

B. Transitory Procedure of Abbreviated Audit:

This procedure consists of obviating, on the part of the Tax Administration, the phase of discussion of the adjustments in an audit process and directly incorporating the technical evaluation.

 

This abbreviated audit will be carried out with respect to the following taxes:

  1. Income Tax
  2. Educational Insurance
  3. Notice of Operation
  4. ITBMS

 

Important details:

  • Tax audits for alleged tax fraud or evasion are excluded.
  • A request for an abbreviated audit procedure must be formalized before the DGI.
  • The request must be accompanied by a CPA certification stating the preliminary verification of full compliance by the taxpayer.
  • The DGI must accept or reject the request within a maximum of 60 calendar days and in no case shall the omission of a response represent positive administrative silence.
  • All resolutions will be sent to the taxpayer’s RUC e-mail address.
  • The resolution resulting from the abbreviated audit will contain the reasoned relation of the audit tests carried out in relation to the control of contingent risks involved in the taxpayer’s business model.
  • After notification of the resolution, the taxpayer has a term of no more than 30 calendar days to pay the tax.

 

C. Benefits of the Tax Regularization:

  1. 25% discount is granted to all taxpayers who pay the total real estate tax corresponding to fiscal period 2024, before November 30, 2023.
  2. A 25% discount is granted to all taxpayers who pay the single rate corresponding to the 2025 tax period, before November 30, 2023.
  3. The remission of 50% of all fines charged or not in the e-tax of taxpayers who, before November 30, 2023, pay the remaining 50% of the fines is authorized.
  4. The penalties applied to the 2022 period to taxpayers on the filing of the Form 03 Return and Sales Form will be completely exonerated. If the taxpayer paid such fine, a non-transferable credit will be generated and it will only be offset with the debt of the same tax.
  5. Interest and surcharges are eliminated for all taxpayers who pay 100% of the delinquent taxes, fees and contributions that are in the administrative or coercive collection phase and 50% of the fines on these taxes, fees and contributions, before November 30, 2023.

 

For further information please contact Nancy Ardines at nancya@icazalaw.com or Nicole Fernández at nfernandez@icazalaw.com.

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