In the Republic of Panama, the usual period for the preparation and filing of the income tax return is March and April, as the case may be. Individual taxpayers are obliged to pay income tax when their income exceeds B/.11,000.00 and legal entities do not have a minimum amount to be obliged to prepare the income tax. The filing dates for individuals are until March 15, if the date falls on a non-business day, it will be the following day. For legal entities, companies have until March 31, in the same way business days apply.
Taxpayers may request an extension or extension to file their returns to avoid penalties. However, only the tax authority grants a new date, which for individuals would be until April 15 and for legal entities until April 30. If the taxpayers cause taxes, they will already start paying surcharges and interests, so taxpayers or tax advisors must take this issue into account. For the income tax return to be effective its presentation, that is to say, to attribute the figures in the boxes of the form in a reliable manner, such as the boxes depending on the income tax return format for transactions with related parties in income, costs and expenses to identify the transactions that later will be evaluated if they comply with the arm’s length principle, only example we can mention some other situations that would lead to a deficient income tax return, among which we can mention:
Not reporting all income: It is important to report all income, including those that are foreign source in case the business model of the company maintains mixed income.
Not including all appropriate deductions: Make sure to include all deductions to which you are entitled as a taxpayer, that they are related to the production of income at its source, that they are related to the line of business, that the group of boxes for expenses are presented in detail with the correct RUC (Registro único del contribuyente) numbers and company name and that the source of all expenses are supported with electronic and fiscal invoices.
If the income tax return you are filing is subject to the non-application of the internal calculation of income tax and your application will be made, be sure to check the header of this application.
Verify that your income tax return complies with the accounting equation: A= P+C (Assets = liabilities+capital).
Not having an adequate record of expenses: Keeping a proper record of expenses is essential to be able to claim the appropriate deductions.
Failing to seek necessary help: If you are having difficulty completing your tax return, do not hesitate to seek the help of a professional or tax preparation software.
Early filing before the due date: Both the taxpayer and the certified public accountant who prepares and countersigns this return by law should consider filing early to mitigate technological risks due to system failure and to file the return in an expedited manner to file the income tax return almost hours before it is due.
It is important to take into account that these errors, or declaring unreliable information or even in the worst case, fraudulent information may result in comprehensive audits that bring as a consequence additional tax assessments and liquidations and even in the most aggravating situation, a possible situation of tax fraud.