Management Accounting Services
Square Tree Corp. boasts a staff of professionals able to assist the clients in the following areas:
- Preparation of annual budgets and bookkeeping.
- Preparation and filing of tax returns for both companies and individuals.
- Preparation and submission of VAT returns in accordance with the terms of the law.
- Consultancy in the field of direct and indirect taxes
Income Tax in Panama
- The revenues of an individual in Panama are subject to the following taxation:
|
FROM
|
UP TO
|
INCOME TAX
|
|---|---|---|
|
USD 0.00
|
USD 11,000.00
|
0%
|
|
USD 11,001.00
|
USD 50,000.00
|
15% on the amount exceeding USD 11,000
|
|
$ 50,000.00 and over
|
|
USD 5,850 on the first USD 50,000 and 25% on the amount exceeding USD 50,000
|
Income Tax – Legal entity
The revenues of a legal entity in Panama are subject to different methods and rates accordingly to the activity conducted and the taxable income.
Traditional Method
This method applies to companies with taxable income below USD 1.5 million.
Starting from 1st January 2014 the following rate applies:
|
FISCAL PERIODS
|
GENERAL RATE
|
|---|---|
|
From 1st January 2011
|
25%
|
The income tax caused must be paid no later than 31st March of the following year (90 days).
The Alternative Calculation of Tax INCOME (CAIR)
This method applies to legal entities whose taxable income exceeds USD 1.5 million.
The legal entity is to pay the sum greater of:
- Net taxable income by the traditional method
- The taxable net income that results from applying to total income taxable a rate at 4.67%.
Exemptions to the CAIR method
When the payment of the Income Tax calculated as per the CAIR method causes for the legal entity to incur in a loss, the taxpayers can request the non-application of CAIR.
Having verified and accepted the application of the legal entity, the General Directorate of Revenues will grant the option of using the traditional method for calculating the Income Tax for a maximum period of 3 years.
