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Editorial Rafael Fernández Lara Idalia Ballesteros Giovana Del C In this edition Consejo José Javier Rivera J. Casilda Quiroz Editorial Rafael Fernández Lara Idalia Ballesteros Giovana del C. Miranda Garzola Milena Vergara Ivana Herrera Ana Sofía Corrales Yinnelle Smart Mariela de Sanjur Lidia Dominguez Gabriela Melgar José Javier Rivera J. Giovana del C. Miranda G. Design and Layout: Gabriela Melgar Rivera, Bolívar y Castañedas @rbcabogados RBC Abogados MAY 2019 Editorial 5 Content 35. Politics 94. Illustrious People RESULTS OF ELECTIONS OF MAY 5 IN PANAMA: 98. Sports Capsule ANALYSIS 107. Trending Topic PANAMA AFTER THE ELECTIONS 110. Cultural Capsule 43. Panamanian Economy THE SOURCES OF PANAMA GROWTH. PER- SPECTIVES AND RECOVERY POLICIES PERSPECTIVES 2019 AND ANALYSIS OF THE SECTORS 79. World Economy THE WEAKNESS OF TRADE WILL PERSIST IN THE SECOND QUARTER, ACCORDING TO THE WTO 103 INDICATOR ANIMAL SUFFER- ING, THE HIGH 92. Environmental Capsule PRICE OF BEAUTY FASHION Invited Writer 7 THE CONSTITUTIONAL AND LEGAL ENFORCEMENT OF TAX ARBITRA- TION IN PANAMA - PART I Content Norms Consult of interest Doctrine & SHOPPING CENTERS Jurispru- MUST HAVE PARKING FOR PREGNANT dence 22 PRINCIPLE OF PRESUMPTION OF LEGALITY 16 OF ADMINISTRATIVE ACTS Legislación y Economía May 2019 Editorial PANAMA AND ITS CHALLENGES IN A COMPLEX José Javier Rivera - Attorney ENVIRONMENT [email protected] fter having completed an electoral pro- economic indicators and on the challenges facing cess in which important changes were intro- the country in the changing context of the world. Aduced to strengthen democracy and reduce In this month’s edition, we have included a sum- the vices that have eroded the confidence of mary of two events presented respectively by citizens of political parties, everything has the National Competitiveness Center and the been discussed and internalized in the country. Chamber of Commerce, Industries and Agricul- ture of Panama, in which economists José Sokol While new government has designated part of its and Manuel Ferreira respectively have exposed team and meetings are held within the transition not only realities that has the country in terms of processes, economic and government sectors economic growth, but also, the reality about the are presenting detailed information on the main inequality that characterizes us and the main ac- 5 LegislaciónLegislación y Economía y Economía Marzo May 2019 2019 tions that the new administration must take to Now, comparative advantage of this administra- achieve human development and have indicated tion is that it will have a majority in the assembly of the financial difficulties that the country will have deputies, which will allow a discussion of urgent in what It concerns infrastructure investments bills in a reasonably short time. This puts pres- and public spending during the next five years. sure on the new administration because on July 1 it must have the blueprints that it will submit to The analysis of the international environment the full assembly of deputies for its execution. that has as spearhead the trade war between the United States and China, tensions derived It is indispensable that issues of importance; from the measures of isolation of the United Both local and international strategy, are widely States towards Iran, the situation in Venezuela disseminated with the citizens and in particular and the instability in Great Britain haven’t esca- with the opposition political parties, the diplo- ped these presentations. which has led to the matic corps accredited here, the unions, the uni- resignation of Theresa May as prime minister. versities, the educators, the young people and the local communities so that the understan- dings are achieved before going to the assembly. Returning to our patio, the truth is that the cha- llenges begin in the reactivation of an economy The decision of the executive to pre- that last year had a moderate growth and that sent to the National Concertation Coun- now depends on the export of copper to in- cil its proposals on issues of particular crease its performance. In the same order of impact such as education, health issue, eco- ideas, there is a need for rapid approval of ru- nomic reactivation, investments in water les regarding public procurement, so-called and the agricultural sector is praiseworthy. public-private partnerships, real estate lea- sing and the definition of a contract between The experiences of dialogue that we have had the company Minera Panamá and the State. throughout our recent democratic life have been fruitful; therefore, one of the first tasks It will also be necessary to activate a se- that the government must undertake has to ries of projects or mega works of the ACP do with the timely communication and the se- and establish urgent measures to gene- rene discussion of the great national issues. rate confidence in the agricultural sector. The isolation has not been fruitful in this pe- All this network needs a specific understan- riod and a spirit of national concord is nee- ding of the Comptroller General of the Republic ded to be able to undertake urgent tasks so that the actions of the government do not mainly in what corresponds to governmen- have bureaucratic impediments of this entity. tal action, transparency, accountability and the prevalence of national interest over parti- Both in the presentation of the CNC and san interests, guilds and personal interests. the CCIAP there is a short list of topics that have the effect of energizing the economy. It will dawn and we will see … L&E 6 Legislación y Economía May 2019 Invited Writer THE CONSTITUTIONAL AND LEGAL ENFORCEMENT OF TAX ARBITRATION IN Javier Mitre Bethancourt PANAMA / PART I Consultant and Academic Investigator of Tax Law Procedure Code of the Republic of Panama, with ummary the approval of Law 76 of 2019, it is introduced with articles 357 to 375 of this document that SThe purpose of this paper is to carry out a includes the new rules in the taxpayer-taxpayer constitutional, legal, jurisprudential and doctri- relationship, the tax arbitration as an alternative nal analysis on the authorization of tax arbitra- means of resolving disputes, which although it tion in Panama in compliance with Article 202 is true, this method was not contemplated in the of the Political Constitution of Panama and original draft of this new code (bill No. 692 of the general principles of Procedural Tax Law, September 24, 2018), it was considered in deba- as well as the constitutional mandate direc- te and in the discussion tables of said project. ted to the Panamanian deputies so that they elaborate procedural laws that are inspired by This was so, since arbitration process is introdu- principles that pursue the simplification of the ced once the first debate in the National Assem- procedures, the procedural economy and the bly has begun, taking into account that the CIAT absence of formalities, in accordance with Arti- Tax Code 2015 model (Inter-American Center of cle 215 of the Political Constitution of Panama. Tax Administrations), which is the document, in which inspires this new Tax Procedure Code Introduction: for Panama, points out in its introduction that this method of conflict resolution is recogni- 7 Recently, through the approval of the new Tax zed as a trend adopted by different countries LegislaciónLegislación y Economía y Economía Marzo May 20192019 both to resolve conflicts of international and And finally ask ourselves, if contrary to what was local nature, with the aim of complying with argued by the detractors of this methodology the principles of speed, procedural economy to resolve conflicts between the tax administra- and ensure the effectiveness of the Tax Admi- tion and taxpayers, by additional settlements of nistration System, taking as reference the draft amounts over 100 thousand balboas, conflicts bill No. 020 of August 8, 2016 previously exis- over the application of international tax matters ting in the National Assembly and that already and complex disputes over Transfer Pricing, raised the idea of tax arbitration for Panama. which are the only issues that can be submitted to arbitration in Panama, could allow that the Considering that this topic has generated inten- collection of an administration could be effec- se debates, especially as to whether arbitration tively collected within a governmental period in the tax field is vitiated by unconstitutionality complying with the budget or if the decrease by regulating a matter that has been considered of the collection to The cause of this alterna- of public order and that deals with one of the tive method responds to mere speculations. main sources of income of the State, it is per- tinent to analyze their qualification both in the This considering that in a conflict that through constitutional and legal scope, since everything arbitration can be resolved in a span of 8 seems to indicate that we are confusing public months, in the face of that same dispute that powers such as creating tributes as rules of pu- can be resolved in the contentious-administra- blic order, with the control of legality by reason tive jurisdiction, it is resolved in 6 years, even of the correct and non-abusive application of after the expiration of a government administra- the tax law in each particular case where it may tion period within which the administrative act be in debate if the tax event is configured or the challenged in the gubernativa way was dictated. amount determined by tax payable is correct. Chapter I It is important to note that this analysis
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