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Tax compliance
Non-compliance with Law 52 carries fines of US$1000 to those who do not provide this information, and with an additional fine of US$100 for each day where the infraction persists
On Friday, October 28, 2016 through the Official Gazette 28149-B, Law 52 was published, establishing the obligation of Corporations and Private Interest Foundations to maintain accounting records for legal entities that do not carry out operations that are perfected, consumed or take effect within the Republic of Panama. These Corporations are also known as also known as Offshore Companies.
Tax compliance in Panama covers:
- Holdings (Properties, Shares, Money, etc). They must provide information that demonstrates the value of the assets that are held and the income that is received from those assets (when required by the competent authority)
- Acts of commerce outside the Republic of Panama or any other that is not an asset holder. They must provide a journal and general ledger (when required by a competent authority)
Resident agents of the companies and foundations
Law 52 also extends the obligation and responsibility to the Resident Agents of the companies and foundations, who must have said accounting records or have knowledge of the place and contact that can be provided.
The Resident Agent must receive this accounting from his client if any local authority requires it within a period of no more than 15 days, the non-delivery by his client will force him to resign as Resident Agent or otherwise he will be fined, and will be removed, and it will be impossible for them to be a Resident Agent again of the said company in the future.
This documentation must be kept for a term of 5 years for tax compliance in Panama, this term will also count for companies that are dissolved during this period.
The rule also requires the Resident Agent to have a register of shareholders or a copy of it, amended article 73 of the Commercial Code now says that the merchant’s books are the Diario and a Mayor, now adding the book of minutes and actions.
Additionally, Law 52 establishes the procedure to inactivate delinquent companies with “any fine or sanction imposed and duly executed, prior order of competent authority.” This eliminates the previous provision that considered the possibility of inactivating companies only when they owe a single rate.
Additionally, the “resident agent certification” is added, which consists of reporting the debts that exist in the fees with the resident agent.
Without this certification, the notary will not be able to change the resident agent.
We urge all our clients and business members to take the necessary measures in a timely manner to In order to correct any deficiency in compliance with the new requirements of the Law
Our sister firm, Castrellón & Diaz Abogados will be at your complete disposal with services of Accounting Records, Income Statement and all other documents necessary for proper compliance and good standing of your Offshore Company or Private Interest Foundation.