Bill 13.

Summary.

The bill amends Article 20 of Law 37 of 2013, which addresses incentives for individuals or legal entities that build, operate or maintain solar power plants and/or installations. It adds income tax deductions based on the value of donated equipment. The provision identifies individual solar panels and cells, accessories, equipment and other inputs for developing solar energy. It also covers an amount equivalent to payments for professional installation services. The equipment and services must be intended for Rural Aqueduct Systems in Panama that are recognized by the Ministry of Health (Ministerio de Salud) as serving community and agricultural purposes.

The same article provides that graduating engineering students may install the panels or solar cells if they are registered for that purpose with the National Energy Secretariat of Panama (Secretaría Nacional de E.nergÍa de Panamá). The text names Law 43 of April 25, 2011 as the law regulating that Secretariat. The proposed deduction thus covers both donated solar equipment and payments for professional services to install it in the specified aqueduct systems. It places these deductions among the incentives available to those who build, operate or maintain solar facilities.

The bill also amends Article 698-A of the Tax Code (Código Fiscal), concerning loss carryforwards. Without prejudice to other existing loss carryforward regimes, and by way of exception to Article 715 of that Code, it provides that losses incurred in a fiscal period by a taxpayer whose annual income does not exceed one million balboas (B/. 1,000.000.00), beginning with fiscal period 2025, may be deducted over the following five (5) fiscal periods. The annual deduction is twenty percent (20%) of the loss. In the year when the corresponding portion is deducted, it may not reduce the taxpayer’s net taxable income by more than fifty percent (50%).

Any part of an annual portion that is not deducted cannot be deducted in later years or give rise to a refund from the State. Loss deductions may be claimed only in the sworn income tax return, rather than in the estimated return. The right to deduct losses is nontransferable, including in consolidations or mergers. The amended article retains its reference to losses incurred from fiscal year 1991 onward and to the exceptions mentioned in its following paragraphs. Finally, the bill provides for the proposed law to take effect on January 1, 2025.

The public bodies connected with these provisions are the Ministry of Health and the National Energy Secretariat of Panama. The provisions could concern people and entities developing solar installations, Rural Aqueduct Systems serving community and agricultural purposes, graduating engineering students, and taxpayers covered by the specified loss carryforward rules.