LAW No.8 (June 1994) promotes the tourism activities in the Country. Income and property tax benefits are granted for construction, furnishing, development of infrastructures, restoration, and also for the operation of convention centers, recreational parks, zoos, tourist and ecotourism resorts, and marinas. A special extensive tax benefit is offered for investments within the designated area for nine tourist development zones located through the Country. Close

Law No. 2 of the year 2006 defines the characteristics and the eligibility for concessions to all lands, including islands, coast, and other properties of the State. Concessions are long term lease agreements, mostly lands, granted by the Ministry of Economics and Finance (MEF) for the use of State owned property to promote physical investment for private business purposes, including agriculture projects. Individuals or corporations that are legally occupying island territory will have the right to obtain a concession, and be able to transfer it to a third party. Law No. 2 also provides incentives to foreigners and national individuals or corporations interested in purchasing island territory for the development of a tourism project. The purpose of the law is to promote leisure developments and homes for retirees in tourism zones which are eligible for tax benefits promoted by Law No.8, 1994 (tourism development). Close

The Article 764 and 766 of the Panamanian Tax Code states a property tax exemption up to a period of 20 years, for houses and apartments. It also provides tax exemptions for property up to US$30,000 (US$150,000 for agriculture purposes). There is tax exemption for 5, 10 or 15 years according to the property value for those properties that do not qualify to the 20 years exemption. After those periods there are in effect two low rate tables to pay annual property taxes. Tables range from 0.70% to 2.10%. An alternate combined progressive rate of the real estate tax is established. Close

The modified Decree-Law N° 9 of August 1997, states a special tax benefits for the restoration of the Casco Antiguo of Panama, the historic Spanish colonial construction. The architectural specification is regulated in detail, together with the usage and type of restoration. Investment for the restoration should take place at least before 2017. Some tax exemption is related to the transfer of properties ownership, income tax, property tax, equipment and materials import duties. Other benefits are low interest rates on mortgages.Close

Law No. 41 (August 2007), amended by Law No. 45 (August 2012), creates a special tax benefit regime for setting International Headquarters operations licenses in Panama that directly service head offices, subsidiaries, affiliates or associated companies for internal services such as; strategic planning, business development, training, operational controls, logistic and warehousing for manufacturing processes and other well-defined administrative, financial and technological management. Some benefits are 100% income tax exemption on income from international operations, as well as capital tax and dividends tax; also tax exemption on transfer tax on export of goods and services, tax deduction of 50% on local income earned from local Panamanian companies. There is a special immigration Visa for the foreign personnel that is employed by the foreign entity; this benefit is extended to the family. Also there are tax exemptions for salaries received and import duties on personal goods.Close

Law No. 2 (March 1986, modified) and law 4 (1994) and other modifications gives some benefit for farming activities toward agro industries and to promote export of agriculture products. Among other benefits there are reductions up to 30% of electricity bills; legal assurance of the land property rights to the farmers that possess 50 hectares or less. Also there is an exemption in income tax for annual income lower to US$300,000. Also there is a lower interest rate on loans. Close

Law No. 24 and 23 (November 1992), Executive Decree No. 89 (June 1993), and Law N° 6 (June 2005). These regulations provide 25 years for income tax exemption on reforestation activities done until November 2017; also, any amount invested by an individual or corporation in this activity is considered as100% deductible from expenses for the determination of their income tax. Other benefits are import duty exemption on machinery, equipment and all reforestation materials for the activity, as well as income tax exemption on dividends, capital gains, preferential interest rate, and tax credit for lenders in reforestation loans. Close

Law No. 3 (March 1986) and law 28 (June 1995)- until the expiration of the rights registered. It provides benefit for industrial activities and export activities. The Law provides a 100% tax exemption on imports of machinery, equipment, and spare parts used in the manufacturing activity; also for income taxes exemption on reinvestment capital, exports, sales, production, and loss carrying forward regime for 3 subsequent years and accelerated depreciation. There are other tax benefit for industries located in specific development areas, such as property tax for 10 years, income tax exception for the first period of 5 years on domestic income and 50% income tax discount for the following 3 years. Law No. 108 (December 1974, modified March1991), creates an additional incentive for export of nontraditional manufacturing products. Close

Law No. 7 (July 1990) and Executive Decree N° 76 of July 1996, provides income tax and property tax exemption for leasing activities of assets located outside of the Panamanian territory. It applies also for leasing of vessels. Accelerated depreciation is permitted with a minimum period of 3 years. Local leasing operations are regulated by the Commercial and Tax Code. Close

Law No. 25 ( November 1992) creates special designated areas or zones to establish a manufacturing or assembly process for exports and to obtain tax benefits on income, labors and immigration. Foreigner citizens and corporations are eligible to build a business and to apply for these benefits. The law provides a 100% tax exemption on any export transaction and income, as well as on all transactions within the Zone; this includes direct or indirect taxes. Also capital taxes are exempted including payments of dividends. Foreigners that invest a minimum amount of US$250,000 in a corporation registered in this regime are eligible for a Permanent Resident Visa as investor.

Law No. 41 (July 2004) creates a special tax regime for Howard development in the Pacific Coast near the entrance of the Panama Canal. The law provides a 100% tax exemption on any export transaction and income, as well as all transactions within the Zone; this includes direct or indirect taxes. Also capital taxes are exempted including payments of dividends. This zone is promoted for warehouse, manufacturing activities, fuel warehousing, import and re-export of goods for exports.

Law Decree 29 (July 1992) creates a tax regime for fuel warehousing and sales. The law provide a 100% tax exemption on any export transaction and income, as well on all transactions within the Zone, this include direct or indirect taxes. Sales to ships in transit for Panama Canal and Internationals Airports are exempted from Income tax.

Law No. 54 of 2001- Call Centers; provides that natural or legal persons that have a grant from the National Regulatory Authority for Public Services for the provision of call center service for commercial use for export may be eligible for the benefits granted by Law 25 of 1992. Close

Law Decree No. 8 (June 1948) create the Colon Free Zone. All custom taxes for imports and exports that are handled within this especial commercial and manufacturing zone are 100% tax exempted. Exports income is 100% exempted, as well as dividends paid which belong to this income. Also, all income which originates from foreign operations is tax exempted. Close

Law No.6 (1998) provides 100% tax exemption on any transaction and income, as well as on all transactions within the Clayton zone which is called “City of Knowledge”. This includes direct or indirect taxes. Also capital taxes are exempted including payments of dividends. Personnel of the corporation registered in this regime are eligible for special resident Visa. Close

Law Nº 8 of June 16, 1987 promotes the exploration and exploitation of oil fields, asphalt, natural gas and other hydrocarbon activities, refining and transportation by pipelines and the storage, marketing and export of exploited or refined substances. Some tax benefits are: Total exemption from income tax during the first five years of production or until the initial investment is recovered; from then on, the contractor shall pay regular income tax rate of 25% of the profits. The law provide total exemption from import duties on machinery, equipment, parts, and any other items, necessary for the execution of the activities under the contract; also special carry-over provisions for income tax purposes and industry depreciation period. Close