Tax on the Transfer of Furniture
and Services Provision (ITBMS)
This tax is commonly referred to in other jurisdictions as Value Added Tax (VAT). The same is seven percent (7%) and will cause the tax among others, the provision of all types of services by merchants, producers, industrialists, professionals, property lessors and service providers in general, excluding those of a personal nature Are provided in dependency relationship and those rendered to the State.
Are included in the concept of service provision, operations such as:
- The performance of works with or without delivery of materials
Intermediation in general
The use of personnel by the owner, partners, directors, legal representatives, dignitaries or shareholders of the company, of the services provided by the company
The lease of movable and immovable property or any other convention or act that implies or is intended to give the use or enjoyment of the property
The public shows, events, seminars, conferences, talks, presentations of artistic or musical groups, artists, singers, performers, professionals of the sport and professionals in general, not gratuitous, that are realized within the territory of the Republic of Panama.
Local and international passenger air transport
The obligation to pay this tax is born in the provision of services, with any of the following acts, whichever comes first:
The issue of the corresponding invoice. Completion of the service provided.
Perception of total or partial payment of the service to be rendered.
According to the tax legislation, the tax base of this tax will be:
A) In the transfer of goods and services of an onerous nature,the price accrued. The same will be integrated with all the amounts charged to the buyer whether they are billed jointly or separately, such as ancillary services performed by the taxpayer and benefit the buyer.
By means of ancillary services, all actions, facts or goods that are inherent or necessary for the realization of the transfer of the good or service, such as home delivery or delivery, packaging, installation or assembly costs and financing interest. These benefits will follow the tax treatment of the main operation.
From said price shall be deducted the refunds as well as the discounts and bonuses of general or current use in the domestic market according to the nature of the operation considered, provided they are stated in the invoice or other documents established by the DGI, in accordance with With the provisions of paragraph 17 of article 1057-V of the Tax Code. The result obtained will be called the net price.
B) In the provision of services by means of leases or assignment of the use or enjoyment of movable property, the agreed price. For these cases, the net price may not be lower than the value of depreciation or tax depreciation, when applicable, affecting the good in the same period, plus a percentage of fifteen percent (15%) of said value. When the asset is already depreciated or amortized, or when the realization of the asset does not correspond, the agreed net price will be applied.
C) In the lease of immovable property and in the acts in which the use or enjoyment of the same is granted, the taxable amount will be the amount of the consideration agreed in the corresponding contract or that included in the invoice or equivalent document accepted Fiscally, the greater of both, accruing in the period of liquidation of the tax.
D) In the affectation to the personal use or consumption of the property of the company, the taxable base will be the book value; While in the personal use of the inventory or of the services provided by the company, as well as in cases of allotments or transactions free of charge or without a fixed price, the taxable amount will be the cost price of the asset placed in the company under conditions Of being sold or the cost price that the service implies for the company.
It will be presumed, unless proven to the contrary, that the differences in the inventories of the companies that commercialize goods, come from the affectation to the personal use or consumption thereof.
E) In the exchange, the greater value that arises from comparing the price established by the transfer or by the provision of the service with that of the goods or services that the taxpayer receives as consideration. The amount of the price to be allocated to the consideration shall be determined using the following valuation criteria:
The shares, securities, bonds, bonds, bills, bonds, and any other value of a private or public nature, issued in the country or abroad, according to the market value on the Stock Exchange. If no contributions are registered, the face value of the document will be applied.
- The real estate and other goods or services, will be computed by the value that is greater between the cadastral value; the book value; or the cost price of the goods placed in condition to be sold or the cost price for the case of the services. The General Directorate of Revenue may reasonably challenge said values.
F) In all cases expressed in the preceding paragraphs, the taxable amount will include the amount of other taxes that affect the operation excluding the tax itself, except for the services that are also charged with the Selective Consumption Tax (ISC) it will not form part of the tax base.
G) In imports, the CIF value plus all taxes, duties, duties, taxes or customs duties that affect imported goods, as well as other customs taxes, even in cases where their application is exempted, as long as they affect the operation Prior to the withdrawal of the merchandise. In cases where the FOB value is unknown (13.5%), thirteen points five percent of the referred value of the concept of freight and (1.5%) one point five percent for insurance.
H) In all cases of intermediation and / or provision of services, the basis on which the tax is to be calculated shall be on commissions, fees or sums agreed or agreed upon, with the total exclusion of reimbursement of expenses.
I) In the case of services provided by restaurants, bars, nightclubs and the like, the basis on which the tax is to be calculated will be the total billing.
Taxpayers may propose procedures for determining the taxable base of those services that are partially provided within the national territory or in those cases that, because of their characteristics, cannot be accurately established. In both cases the DGI must issue a Resolution based on this.
When payments are made in connection with a mandate from third parties linked to the service provided, they will not integrate the taxable amount up to the amount of the payment made by third parties, provided that they are duly supported with the corresponding legal documentation. This documentation must accompany the invoice of the service provided and be archived jointly.