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October 17, 2023
2023-1732

Panamanian Tax Authority further extends deadline for resident agents to file affidavit on accounting records of offshore entities

  • The deadline for Panamanian resident agents to file affidavits corresponding to the possession and location of offshore entities' accounting records has been further extended until 31 December 2023.
  • This extension implicitly grants additional time for these entities to provide the relevant information to their resident agents.
  • Prior to this extension, the deadline to file the affidavit had been extended to 15 October 2023.

The Panamanian Tax Authority has issued Resolution No. 201-9356 of 4 October 2023, which further extended, until 31 December 2023, the deadline for resident agents to file affidavits corresponding to the possession and location of offshore entities' accounting records.

Background

Law 52 of 2016 establishes that legal entities that do not carry out operations that are completed, consummated or take effect in Panama (known as offshore entities) are required to keep accounting records and supporting documentation, which must be available for a period of at least five years.

Subsequently, Law 254 of 2021 established that (i) these entities must provide to their resident agents, by 30 April of each year, copies of their accounting records for the fiscal period ending on 31 December of the immediately preceding year, and (ii) the resident agent must file an annual affidavit with the Tax Authority regarding the possession and location of these records.

The resident agents must specify which entities keep their accounting records and supporting documentation in the resident agent's office. Likewise, it must specify which entities keep their accounting records and supporting documentation in a place different than the resident agent's office, inside or outside of the Republic of Panama. In these cases, the resident agent must detail that they keep a copy of the accounting records, as well as the name, contact information and physical address of the person who retains these records.

Extension of the deadline

Through Resolution No. 201-9356 of 4 October 2023, the Panamanian Tax Authority further extends, until 31 December 2023, the deadline for resident agents to file affidavits corresponding to the fiscal years 2021 and 2022, under the provisions of Law 52 of 2016, as amended by Law 254 of 2021. This extension also effectively extends the term for offshore entities to provide this information to resident agents. Nonetheless, it remains important for offshore entities to provide information about their accounting records to enable their resident agents to prepare in advance and timely file the affidavit.

Prior to this extension, the deadline for the resident agent to file the affidavit had been extended to 15 October 2023, through Resolution No. 201-6489 of 6 July 2023.

Resolution No. 201-9356 became effective as of its promulgation in the Official Gazette on 13 October 2023.

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For additional information with respect to this Alert, please contact the following:

Ernst & Young, Panama

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 

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