globaltaxnews.ey.comSign up for tax alert emailsPrintDownload

06 April 2020

Panama’s National Assembly approves bill with special social measures that temporarily suspend payment of public services

Due to the COVID-19 pandemic and in response to the declaration of a national state of emergency in Panama, the National Assembly approved in third debate Bill No. 295 of 2020, which would establish measures to help mitigate the economic effects of COVID-19. The bill is awaiting publication in the Official Gazette.

Specifically, the bill suspends the payment for public utilities, such as energy, residential and mobile telephone and internet services, for four months starting from 1 March 2020. Individuals would have to pay for those services at the end of the four-month period and the amounts due for that period would be prorated over three years.

To be eligible for the suspension period, individuals must be economically affected by the measures taken due to the national state of emergency. They also must meet one of the following requirements:

  • Have family income of less than US $2,000 per month
  • Have family income that is reduced
  • Have an employment contract suspended
  • Be dismissed from work or not working due to the declaration of the national state of emergency
  • Be a retiree or pensioner (i.e., those who collect disability)
  • Be terminated or suspended from work or have working hours reduced as of 1 March 2020
  • Be a self-employed worker or a micro or small enterprise that has had its income reduced
  • Be an owner of a restaurant, bar, casino, or public or private transportation service that has had its income reduced

Additionally, the bill establishes that the Government would assume the payment of a “solidarity bonus” (i.e., payments to employees affected by COVID-19) to each employee of individuals or entities engaged in commercial activities whose businesses have been temporarily closed and have opted for the provisional suspension of their employment contracts for 90 days.

______________________________________________________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young Limited Corp., Panama City
Ernst & Young LLP (United States), Latin American Business Center, New York
Ernst & Young LLP (United Kingdom), Latin American Business Center, London
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific

ATTACHMENT

Document ID: 2020-5530

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2025, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more