Tax Differences Between Builders and Developers
The direct connection between the specific activities of construction companies and real estate developers can lead to serious errors in income tax statements in Panama.
Monday, August 20, 2012
Construction companies have three options for determining the yearly income on which they will be taxed, while development companies which own real estate projects, and which do not qualify for the special rate of item a) of Article 701, are subject to declaring income according the date of registration of deeds in the Public Registry of Panama, which recorded the transfer of the real estate property.
The Directorate of Taxation issued a resolution which widens accelerated depreciation and is applicable to goods purchased and investments made this year.
The Costa Rican Department of Taxation will audit companies that declare income below the minimum percentages required.
The deficit between supply and demand for housing solutions is growing every year, requiring state policies for the creation of credit systems for low-income sectors.
Limiting the deduction of interest from income tax and eliminating the exemption from payment of 15% for dividend distribution between companies are part of the changes included in the project.
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