Friday, August 21, 2020
Panama's parliament is presenting considering changes to income tax rates for small- and medium-sized businesses, included in Bill 358.
The Bill includes project of law no. U-20, which in Article 1 amends Article 699-A of the tax code to provide for reduced rates of corporate tax for SMEs that satisfy the following conditions:
The law includes provisions to deny access to the concessionary rates where businesses are artificially split to meet the aforementioned conditions.
The rates are as follows:
The standard rate of corporate tax is 25 percent on net taxable income.
Under new Article 700-A of the tax code, for natural persons qualifying as SMEs (who are registered in the business registry and whose gross annual income does not exceed 500,000), the following rates will apply:
Law no. U-20 would become effective from the day of its enactment.
Having been tabled on July 27, Bill 358 was approved at first reading on August 13, 2020. According to information published on the website of the National Assembly, the Bill was due to be subject to a second debate on August 18, 2020.