Taxpayers have more time to claim the tax amnesty benefits. They also have until June 30, 2020 to file forms and reports that were due in February, provided certain requirements are met.

Panama published, in Official Gazette No. 28985-C, Law 134 of 2020 (the Law), which extends the tax amnesty from February 29, 2020 to June 30, 2020 because of COVID-19. The Law also modifies Law 76 of 2019, which established the Tax Procedure Code.

Tax amnesty

The Law amends Article 5 of Law 99 of 2019 to extend the tax amnesty period from February 29, 2020 to June 30, 2020. Under the amnesty program, taxpayers will receive an 85% reduction in the interest, surcharges and fines imposed on overdue taxes, provided the taxes are paid on or before June 30, 2020.

The Law also extends the period for taxpayers to comply with their payment arrangements from February 29, 2020 to December 31, 2020. The December 31, 2020 compliance date also applies to payment arrangements entered into under this Law.

Additionally, the Law establishes that, when taxpayers make a payment that is applied to overdue taxes, they will automatically benefit from the tax amnesty, without requesting the amnesty from the tax authorities, as previously established by Law 99 of 2019.

Tax Procedure Code

The Law amends Article 101 of Law 76 of 2019, which established the Tax Procedure Code. The amendments establish that, in the event of a declaration of a state of national emergency, a taxpayer's personal notification preference does not have to be followed, provided that the notifications do not involve coercive collection procedures.

The Law amends Article 392 of Law 76 of 2019, to eliminate the effective dates for Articles 1,2, 3,4, 5,6, 9, 11, 78, 100, and 101 of Law 76 of 2019 and allow those articles to automatically enter into force.

Filing of certain forms

Forms and reports that taxpayers had to file during February 2020 may now be filed on or before June 30, 2020. This measure applies to taxpayers that comply with the requirements of the stimulus package to be issued by the Panamanian Government because of the state of emergency declared to mitigate COVID-19, or taxpayers that maintain their regular operations.

The following forms and reports are subject to the extension:

1. Report of donations received
2. Non-reporting taxpayers (NGO) report
3. Payroll report
4. Reports of retirement funds, pensions and other benefits
5. Reports submitted by insurers - certification of medical expenses per insured
6. Certification of interest on residential mortgage loans with preferential interest
7. Report on purchases and imports of goods and services
8. Credit card sales reports
9. Transfer price reports
10. Income tax returns — individuals
11. Income tax return — entities
12. Income tax return — free zones

The DGI will verify the veracity of the information filed by the taxpayer to validate its accuracy. Sanctions will apply for the filing of false or inaccurate information.

The Law orders the retroactive effect of the amendments to Law 99 of 2019 and Law 76 of 2019.

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