In October 2024, Panama’s National Assembly approved Law 446, enacting a two-month tax moratorium from November 1 to December 31, 2024. This initiative offers taxpayers the chance to settle overdue taxes—such as Income Tax, Property Tax, ITBMS, and Selective Consumption Tax—without penalties or interest. The goal is to alleviate financial burdens and strengthen Panama’s economy by redirecting recovered funds to public projects.
What the Tax Moratorium Covers
Law 446 covers several tax obligations, providing relief from penalties and interest on the following:
- Income Tax: Assists individuals and corporations with overdue income taxes.
- Property Tax: Waives penalties for property owners with late taxes.
- Operation Notice Tax: Provides relief for businesses behind on commercial license fees.
- ITBMS (Transfer Tax on Movable Goods and Services): Supports businesses with unpaid sales tax and VAT obligations.
- Selective Consumption Tax: Reduces excise tax penalties for applicable businesses.
- Unique Rate for Legal Entities: Waives fees and interest for this specific tax.
Representatives from the Ministry of Economy and Finance (MEF) emphasize that this moratorium is designed to aid taxpayers in achieving compliance and provides a fresh start for those who have fallen behind. If you would like to see the official document (only available in Spanish), please go here.
Key Eligibility Requirements
This moratorium is open to both individuals and businesses, including those currently in administrative or enforced collection phases. Taxpayers eligible under this law can settle outstanding balances in full, avoiding penalties and fees. Additionally, legal entities acting as retention agents can clear withheld taxes such as income tax and educational insurance, up to June 2024, without additional charges.
Impact on Panama’s Economic Growth
The moratorium is not only a measure of relief but also an opportunity to funnel millions of dollars back into the economy. Increased tax compliance from this initiative is expected to support critical public infrastructure projects, helping to enhance Panama’s investment appeal to foreign stakeholders and strengthening the overall economic landscape.
How Taxpayers Can Benefit
The government is encouraging all eligible taxpayers to make use of this two-month relief period to improve their financial stability. Individuals and companies can benefit by settling outstanding balances without the financial burden of additional interest or fees, especially those facing enforcement actions who are looking to start fresh.
Buying Property During the Tax Moratorium with Casa Solution
For those interested in buying property, the 2024 tax moratorium presents an ideal opportunity to explore real estate in Panama. Casa Solution offers extensive listings across Chiriquí and throughout Panama, from ideal homes to investment properties and vacation spots. Sellers can settle any outstanding tax obligations without penalties, simplifying the process. Casa Solution provides the expertise to make this journey straightforward, ensuring a confident, informed buying experience. If you’d like to know more about us, please visit Casa Solution.
Why This Matters for Panama’s Future
Panama’s tax moratorium delivers immediate financial relief, while also laying the foundation for long-term economic growth. This support for residents and businesses strengthens Panama’s resilience, creating a welcoming environment for investors, retirees, and those seeking a fresh start. The tax moratorium reflects Panama’s commitment to a stable, thriving economy, positioning the country as an ideal destination for those seeking growth and opportunity.
