• Service: Tax, Global Indirect Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 11/4/2013

Panama - Changes to taxation of biofuels 

November 4: New law in Panama affects the taxation of biofuels and related products.

Ley 76 (published in the official gazette 72400-A (22 October 2013)) provides for:

  • A new consumption tax (impuesto al consumo) on fuels and certain imported petroleum derivatives
  • A reduction in the consumption tax rate on fuels and locally produced petroleum derivatives
  • An increase to the value added tax (VAT) and “selective” consumption tax (impuesto selectivo al consumo—ISC) on certain alcohol products used for biofuel preparation

The law also repeals the selective consumption tax (ISC) on yachts, sail boats, pleasure or sports vessels, ships, and aircraft and helicopters not intended for commercial use

The provisions concerning the consumption tax on fuels and petroleum derivatives are effective retroactively, 1 September 2013.

Read an October 2013 report (Spanish) [PDF 375 KB] prepared by the KPMG member firm in Panama: Se modifican tributes aplicables a biocombustibles

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