Panama Tax Authority Implements Penalties and Temporary Closure Procedure for Non-Compliant Commercial Establishments

Panama City, Panama – In an effort to bolster transparency in tax compliance control, the Panama Tax Authority has introduced a new resolution outlining penalties and procedures for temporary closure of commercial establishments that fail to fulfill their obligations regarding invoices or receipts. The resolution, numbered 201-4983 and issued on June 2, 2023, derives its authority from paragraph 3 of article 11 of Law No. 76 of 1976.

Under this resolution, the Tax Authority is empowered to impose economic penalties and order the temporary closure of non-compliant commercial establishments. Upon identification of infractions, the Tax Authority will issue a resolution specifying the penalties in accordance with the law.

To effect the temporary closure, Tax Authority personnel will personally notify either the taxpayer or the responsible individual of the commercial establishment where services are rendered or products are sold. Following this notice, the establishment will be closed with the placement of seals and/or tape at its entrances to ensure compliance.

It is worth noting that the taxpayer may contest the resolution ordering the closure by filing an appeal. However, even in the presence of an appeal, the temporary closure will only be lifted once the taxpayer rectifies the identified irregularities and settles the imposed fines.

In cases where a commercial establishment is ordered to temporarily close but continues to operate in defiance, the taxpayer’s actions will be considered a repeated offense. Consequently, the Tax Authority will impose fines ranging from USD10,000 to USD25,000 and once again order the temporary closure of the establishment.

By implementing this procedure, the Panama Tax Authority aims to promote greater transparency and adherence to tax regulations. The resolution serves as a stern reminder to commercial entities to uphold their obligations regarding the issuance and maintenance of invoices or receipts, in line with Panamanian tax laws.

The resolution is expected to foster a stronger culture of tax compliance among businesses, ultimately contributing to the growth and stability of the Panamanian economy.