Bill 250.

Summary.

The bill amends Article 717 of the Tax Code (Código Fiscal), which addresses tax obligations when a business ends. An individual or legal entity that, because of that termination, ceases to be subject to income tax in respect of the business would have to file a sworn return and a final balance sheet within the following thirty days. The taxpayer would also have to pay, in a single payment, the tax due up to the time the business ceased operating. A legal entity would additionally have to submit an accounting of retained earnings up to that time and proof of payment of the income tax on distributed dividends.

For legal entities and individuals acting as employers, the amended article requires the sworn return and final balance sheet to be accompanied by a clearance certificate issued by the Social Security Fund (Caja de Seguro Social). The certificate must show that they owe no money to the institution. Alternatively, they may submit a certificate from that institution establishing that they were not required to register under its system. These documents would accompany the return and balance sheet submitted upon termination of the business.

Legal entities undertaking this procedure would also have to submit a clearance certificate from the municipality in which they are registered. If registered in more than one municipality, they would have to provide a certificate from each. The bill then adds a paragraph concerning dissolved legal entities that had no operations or generated no taxable income in the Republic of Panama. To notify the Directorate General of Revenue (Dirección General de Ingresos) of their dissolution and obtain removal from the e-Tax 2.0 system, they would have to submit a written notice, a certificate from the Public Registry (Registro Público) recording the dissolution, and a duly notarized sworn statement by a Certified Public Accountant (Contador Público Autorizado). That statement must certify that the dissolved entity received no taxable income in Panama or conducted no operations within the tax territory. These would be the sole requirements for removal in those cases; neither a municipal clearance certificate nor one from the Social Security Fund would be required.

Article 2 expressly identifies the amendment to Article 717 of the Tax Code. Article 3 provides that the proposed law would take effect upon promulgation. The provisions involve the Directorate General of Revenue, the Social Security Fund, municipalities and the Public Registry in the stated procedures. They concern individual employers, companies ending business activities or dissolving, accounting professionals, and those handling tax and municipal obligations when a business closes.