On 17 April 2023, the Panamanian tax authority (DGI) released Resolution No. 201-3486, which introduced penalties for employers who do not submit their monthly withholding tax returns Form 03 for employment income (in Spanish, Planilla 03). The Resolution No. 201-3486 was officially published in Official Gazette No. 29770-a on 27 April 2023 and entered into force from that date onward. The penalty for not timely filing monthly withholding Form 03 is as follows:
| Employer’s annual income
(In Panamanian Balboa) |
Penalty Amount |
| From B/. 0.01 and up to B/. 150,000.00 | B/. 100.00 |
| From B/. 150,000.01 and up to B/. 500,000.00 | B/. 500.00 |
| From B/. 500,000.01 onwards | B/. 1,000.00 |
Every employer is required to withhold and pay the personal income tax from their employees’ accrued salaries on a monthly basis. This amount must be paid to the Social Security Agency (Caja de Seguro Social, CSS) and file Form 3 to the DGI. Failure to submit such withholding form will result in a general fine as outlined in the Fiscal Code, amounting to USD 1,000.
