Withholding tax in Panama | KPMG Global
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Panama: Withholding tax, goods and services purchases satisfying annual threshold

Withholding tax in Panama

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).


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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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