Panama: Corporate Classification Registering & Tax ID
The Directorate General of Revenues, most commonly known as “DGI”, attached entity of the Ministry of Economy and Finance of the Republic of Panama. Adopted past March 7, 2018 Resolution No.201.1254, which establishes that corporations constituted in the Republic of Panama must pass through a new parameters for the register and obtain their Tax Identification Number, most commonly known as RUC.
This new process of registration is applicable to all corporations. Even including those that due to their activities do not generate taxable income or are not required to submit a sworn income tax return.
As per the Resolution No.201.1254, corporations will now be subdivided on their register by its commercial activity as either:
- ISR Income of Panamanian source.
- Income from non-Panamanian source.
It is highly important to understand that “ISR”, according the Panamanian Tax Law, stands for Income Tax.
As per the first category (Legally Identified Class A), which is only applicable to any corporation that produces their complete or partial income from a Panamanian source. Thus for corporations that fall within these parameters, will be obligate by Law to present a sworn income tax declaration, as of the registration of the corporation.
Regarding the second category (Legally Identified Class B) , which is only applicable to those corporations that are incorporated solely to own real estate properties or that will not generate income, or those generate annual income but it is 100% derived from foreign source. Thus for corporations that fall within these parameters, are not required to submit a sworn income tax declaration.
It is important to highlight the fact that corporations that are previously registered, will also have to update their status before the Directorate General of Revenues, in order to be included within one of those 2 classes.
Juan Raúl Sevillano