Summary.
The bill amends Article 19 of Law 254 of 2021, which amends Article 3 of Law 52 of 2016. It proposes that the resident agent of a legal entity that is neither a taxpayer nor a tax resident in the Republic of Panama under the Tax Code, and therefore need not file an annual income tax return, submit a sworn statement each year to the General Directorate of Revenue (Dirección General de Ingresos) of the Ministry of Economy and Finance (Ministerio de Economía y Finanzas). The deadline would be September 30 of each year. The statement would list the legal entities for which the agent acts, their legal names, and their Panama taxpayer registration numbers generated to pay the annual franchise tax. Where records or financial statements are outside the agent’s custody, it would also identify the person holding the originals, that person’s contact details, and the physical address of the documents.
The amendment to paragraph 5 of Article 22 of Law 254 of 2021, concerning Article 6 of Law 52 of 2016, defines accounting records by their ability to show transactions, assets, liabilities, and equity, establish the entity’s financial position, and support financial statements. It also proposes allowing the resident agent to submit an annual financial statement instead of holding accounting records and supporting documents. Prepared under accepted international standards, that statement would contain a balance sheet and income statement signed by the ultimate beneficial owner or legal representative.
The bill adds provisions to Law 52 of 2016. When original records and supporting documents are held elsewhere, the resident agent would need a certification from the legal entity and a sworn statement signed by an authorized representative or an authorized public accountant. These documents would give the custodian’s name and contact details and the physical address where the documents are kept. The bill also proposes exempting certain private interest foundations and entities exclusively holding assets from submitting accounting records and financial statements when their ultimate beneficial owners are Panamanian tax residents required to file income tax returns. Mere ownership of assets would require certification by an Authorized Public Accountant in the Republic of Panama or by the entity’s board of directors. Private interest foundations would be exempt from that certification and prohibited from conducting commercial activities.
Further exceptions would cover legal entities listed on recognized local or international stock exchanges, entities owned by international or multilateral organizations or a State, and shipowners and charterers of vessels registered exclusively for international or domestic service with the Merchant Marine of the Republic of Panama (Marina Mercante de la República de Panamá). Responsibility for preparing and delivering accounting records to the resident agent would rest solely with the legal entity. The text recites the amendments and additions, provides for publication in the Official Gazette, and sets commencement upon publication. Its provisions concern the General Directorate of Revenue and the Ministry of Economy and Finance and could affect resident agents, accountants, foundations, asset holding entities, listed companies, and the maritime sector.
What it proposes.
- Annual sworn filings by resident agents with the tax authority.
- Accounting records, financial statements, and custody of supporting documents.
- Exceptions for certain legal entities and maritime activities.
Who it would affect.
- Resident agents of legal entities covered by the bill.
- Legal entities whose accounting records are held inside or outside Panama.
- Private interest foundations and asset holding entities.
- Listed legal entities, entities owned by public or international bodies, and shipowners or charterers covered by the exceptions.
Key points.
- A resident agent would file an annual sworn statement by September 30 listing the legal entities served and the required information about their records.Art. 1
- A resident agent could submit a signed annual financial statement instead of holding accounting records and supporting documents.Art. 2
- When originals are held outside the agent’s offices, the agent would obtain a certification and sworn statement identifying the custodian and physical location.Art. 3
- Certain private interest foundations and entities exclusively holding assets would be exempt from submitting accounting records and financial statements.Art. 4
- Mere ownership of assets would require certification by an Authorized Public Accountant or the board of directors, with an exception for private interest foundations.Art. 5
- Listed entities, entities owned by specified organizations or States, and certain shipowners and charterers would be exempt from annually providing records or financial statements to the resident agent.Art. 6
- The legal entity alone would be responsible for preparing and delivering accounting records to its resident agent.Art. 7
- The bill provides for publication in the Official Gazette and commencement upon that publication.Arts. 9-10