Panama has recently approved a new law, Tax Amnesty in Panama Law 99 of 2019 (the “Law”), relating to outstanding fines and penalties payable by Panamanian companies and foundations.
Currently, companies and foundations that do not pay their annual tax of $300 and $400 respectively incur fines and penalties, which over time do add up.
The benefit of the new Law is that it will allow such entities to be reinstated and/or returned to good standing, at a much reduced cost, since it will not be necessary to pay outstanding penalties and fines. Please note that overdue annual taxes will still be payable.
The Law proposes that the amnesty will expire on 28 February 2020 and so there is only a short window to take advantage of this opportunity. It is notable the Law provides that there shall be no further amnesties until 2024.
For overdue annual tax payments made before 30 November 2019 then 100% of the fines and penalties shall be waived. This reduces to 95% for December 2019 payments, 90% for January 2020 payments and 85% for February 2020 payments.