Obligation of Keeping Accounting Records for Companies that do not Perform Operations in Panama
04/10/2019
Horizontal Property and the Amendments to the Real Property Tax
04/10/2019Law No. 52 of 2016 has been regulated by Executive Decree No. 258 of September 13, 2018. This regulation has made clear the scope of the Law, stating that legal entities that do not carry out commercial acts in Panama must keep Accounting Records and present them to the General Directorate of Income in case of request, according to the activity they perform.
Regarding the definition established in Article 2 of Law 52 on Accounting Records, a division has been made based on the activity of the legal entity, that is, Legal Entity that “does not carry out Commercial Acts” and Legal Entity that “carries out Commercial Acts” Trade”.
- If you are only the holder of assets of any kind, the Accounting Records must show the value of said assets and the income received from said assets.
- Those who carry out commercial acts outside the Republic of Panama must keep a Journal and a Ledger, except for those who carry out the activity of Buying and Selling Credit Titles and Commercial Securities.
However, they are obliged to provide any supporting documentation and additional information that is required by the competent authority.
In addition, they incorporate that the accounting records must be prepared based on the International Financial Reporting Standards (IFRS) and must be endorsed by a Certified Public Accountant of the Country where the records are prepared.
The documentation requested by the Panamanian Authorities must be provided in the Spanish language and if it is not in that language, then it will be your responsibility to provide a translation by an Authorized Public Translator of the Republic of Panama. Panama.
Accounting records must be sent with the certification required in your country, which guarantees the printing of the information and the endorsement of the accounting system used for said records. It is important to mention that the Resident Agent is obliged to know the physical location and maintain the contact information of where the accounting records are kept.
If you do not have the information, in cases where it is required by the Tax Administration, you will be obliged to resign as an Agent. We remain at your disposal for any questions you deem pertinent. Sincerely
,
ICAZA, GONZALEZ-RUIZ & ALEMAN
