• Service: Tax, International Executive Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 9/4/2012

Panama - Tax incentives for multinational headquarters 

September 4: There are new tax provisions for multinational taxpayers having their headquarters located in Panama.

Ley 45 (Spanish) [PDF 1.2 MB], published in the official gazette (Gaceta Oficial) 10 August 2012, modifies the rules and regulations established in Ley 41 (August 2007) (Spanish) [PDF 699 KB] for the establishment, operation, and licensing of multinational headquarters (régimen especial para el establecimiento y la operación de las sedes de empresas multinacionales y la comisión de licencias de sedes de empresas multinacionales).

For those holding a multinational headquarters license in Panama:

  • There is an exemption from income tax (impuesto sobre la renta) for the headquarters with respect to services provided to an entity not generating taxable income in Panama, thereby eliminating the requirement that the entity must be located outside of Panama.
  • There is an exemption from dividend tax (impuesto de dividendos) and complementary tax (impuesto complementario).
  • There is an exemption from the tax on the transfer of movable property and rendering of services (impuesto de transferencia de bienes corporales muebles y la prestación de servicios) with respect to the headquarters exporting or providing other services to an entity that does not generate taxable income in Panama, eliminating the requirement that the entity must be located outside of Panama.
  • There are new rules for reporting financial statements, the consolidatied income statement (consolidación de las ganancias), and reports of the amounts of tax paid in other countries.
  • Salaries and other employee benefits received by those individuals holding permanent employee visas will be considered foreign source income when the payments come from abroad, thereby eliminating the requirement that such payments must come from headquarters.

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