Panama’s Ministry of Economy and Finance announced changes to regulations regarding the responsibilities of withholding agents, with respect to the tax imposed on the transfer of goods and services (Impuesto a la Transferencia de Bienes Corporales Muebles y la Prestación de Servicios—ITBMS).
Executive Decree No. 128 (29 May 2017) provides that annual purchases of goods and services equal to or greater than 5 million balboas (B / .5,000,000.00) during the immediately preceding fiscal period are subject to withholding tax. The tax to be withheld is an amount equal to 50% of the ITBMS included in the supplier's invoice or equivalent document.
The tax administration will publish each year a list of retention or withholding agents that meet the criteria, no later than 1 September of each year. Those listed agents must begin withholding effective in January of the following year. Guidance (Resolución N° 201-3651) issued in June 2017 addresses the requirements.
Read a July 2017 report (Spanish) prepared by the KPMG member firm in Panama
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