Panama

Taxable period

The accounting period is the period for which the company makes its accounts. Returns shall be made upon completion of the accounting period and may not exceed 12 months. For most companies, it is usually from 1 January to 31 December.

Tax returns

The due date for filing is three months after the end of the fiscal year, with the possibility for an extension of up to one additional month.

Payment of tax

Income tax payment shall be made depending on the income tax return and shall be made no longer than three months after closing of the corresponding accounting period.

Taxpayers must pay estimated taxes (usually the same amount as generated income) at the end of the sixth, ninth, and 12th month after the end of the corresponding accounting period.

Tax audit process

Tax authorities select the taxpayers subject to audit based on internal criterion.

Statute of limitations

The tax administration may audit the income tax returns filed within the last three years from the last day of the year on which the tax return was filed.

With regard to VAT, the tax administration has the authority to charge this tax within five years from the last day of the following month in which the tax was due to be paid.

Topics of focus for tax authorities

Among the topics of focus are non-deductible expenses, withholdings, and VAT.