Panama's New Corporate Tax Machines - WHAT?

Day 151 Wednesday (Miercoles) - Panama City

OK, so like everywhere in the world you have taxes to pay. Income taxes if you make money as an individual, Corporate taxes if you run and oprate a business. Panama is no different.

But, here in Panama they are incorporating something new called the Fiscal Printer that all businesses starting tomorrow, March 1st have to start using to track tax dollars. Now these machines can run between $1000-$2000 a pop and then you have to have some kind of monthly maintenance agreement with the maker to make sure the darn thing works.

As in any law, exceptions rule the roost and I am here to show you what those exceptions are. This information came out yesterday the 28th of February.

Have fun if this pertains to you, as you can see below the exception list is pretty extensive and you should always consult your tax attorney to make absolutely sure you are exempted. Please pardon some of the sentence structure as the translation is not always perfect.

EXCEPTED PERSONS USING EQUIPMENT TAX

 By: Augusto Garcia
 According to current regulations on implementation of Fiscal equipment, all persons performing operations related to the transfer or sale of goods and services, are required to document their transactions through tax receipts issued by duly authorized equipment by the DGI. The use of such equipment is required by all businesses required to do so from March 1, 2012.
 This problem has significant importance if we consider that in principle all other invoices and equivalent documents until March 1 have been used in commercial transactions are abandoned, with tax receipt or tax bill the only valid document to document this such transactions and to support the costs and accounting costs taxpayers before the DGI.
 Based on the above is necessary to clarify the people who are expressly exempted from the use of Equipment Tax, and therefore are entitled to use other evidence other than those issued by the Tax Team. These people include the following exception:
 1. Agricultural activity whose annual gross taxable income are less than two hundred fifty thousand dollars (B/.250, 000.00): Agricultural activity covers production of feed, salt, timber, agricultural raw materials, poultry, livestock and forestry homegrown grains such as rice, maize, sorghum and other agricultural products.
 2. The transfer of real estate property and those which must be given or appearing on public documents.
 3. The public transport of passengers, nationally and internationally by land, air or sea à covers the public transport system (Metrobus) and passenger transport on inland routes and airlines, and shipping.
 4. The cargo transport services of petroleum products.
 5. Operations and general services made ​​by banks and other financial institutions, including leasing companies and investment funds and the activities of the banks credit or financial fiduciary governed by special laws, cooperatives, institutions and savings funds, pension funds, retirement funds and social security and savings and loan institutions.
 6. The operations performed by the stock exchanges and authorized products to operate in Panama.
 7. The services provided under the dependency ratio in accordance with the Labour Code includes wage laborers.
 8. The services provided in liberal professions, craft and art, independently or through civil societies: Examples of professions include lawyers, architects, accountants, engineers, doctors and others. These professionals should use when developing its Fiscal equipment profession through corporations.
 9. Individuals or legal entities engaged in sales activities of products or services through vendors who do not use motor vehicles. Those who use motor vehicles for the development of these activities are not required to use the equipment Prosecutors are authorized until fiscal printers phones.
 10. The activity of renting of buildings under contracts notarized or registered in the Ministry of Housing and Land Management, conducted by individuals or corporations to manage their own property without the intervention of third parties.
 11. The activities of the co-owners associations related to the collection of maintenance fees to meet the horizontal property regime.
 12. The activities of commission agents corresponding to reimbursable expenses in which case they may be documented by non-tax receipts. The DGI regulate this provision.
 13. Institutions, associations and nonprofit associations in the country, provided they are duly authorized to receive donations deductible by the Internal Revenue Service: The DGI has clarified that in the case of such entities, they are not required to Prosecutors used equipment from its registration with the Ministry of Government. However, for purposes of deductions of income tax proceeds of donations made ​​to such entities, they are required to be registered with the DGI.
 14. Private entities duly authorized by the Panama Maritime Authority to ensure compliance with building regulations, navigation, pollution prevention and safety of merchant ships, passenger transport, leisure, scientific research, work, oil exploration and drilling of international traffic, whether or not registered in the Merchant Marine of Panama.
 15. The hostels that are less than seven quarters. The hostels are defined as the tourist facility operated by an individual or family with their own room or house owners, characterized by small establishments providing personalized service and offer regional home cooking, and its construction is closely related to architecture popular in the area.
 16. Any other activity which by its nature or volume of transactions in the opinion of the Department of Revenue should be exempted from the use of tax teams, however, the Directorate may request information necessary to monitor the obligation to document as if fiscal printer.
 17. The fuel stations are not required to use equipment prosecutors, and may continue to use manual or pre-printed invoices duly authorized by the DGI.
 18. The companies involved Freight shall not be obliged to use Tax Team, until there are no local market portable Fiscal Teams: This exception covers all types of cargo including sending parcels.
 19. Businesses engaged in leasing of vehicles, are obliged to use Equipment Tax only for the daily close of their operations. -> The above implies that they are not required to issue tax receipts for each lease made.
 20. The Toll Collection Booths that is owned by the National Highway Company (ENA), are not obliged to use the equipment tax is to be noted that the sale of the northern corridor to ENA has not been completed, which is why the tollbooths of this corridor should use fiscal printers. In the case of the southern corridor is not necessary to issue tax receipts.
 21. Companies with massive turnover namely:
 • Electric Companies
 • Telecommunications Companies
 • Cable Television
 • Wholesale Distributors (Café Duran, FEDURO, etc..) Provided they maintain a turnover in excess of 85.000 monthly impressions.
 • This exception is necessary for the DGI clarify whether these companies will be granted a certificate stating his condition except for the use of equipment Prosecutors.
 22. The sites identified by Provinces, Districts, Counties, Villages, and areas populated place in the list attached to the resolution of the Director General of Revenue No. 201-10796 (locations nationwide are considered as "Hard to Reach"), not Teams are required to purchase Tax.
 23. Homeland areas where there is no electricity, no Tax shall use equipment.
 Small traders with a turnover less than B /. 36,000.00 per year are not exempt from use equipment expressly Fiscal and therefore must use the teams. The DGI has given them the option to have in case you do not wish to use this equipment, submit a formal application to the DGI, and are subject to an audit to verify that their income is less than the sum mentioned above.