Dear Clients: Please be advised that after some misunderstanding on a tax law approved by the Panamanian Legislative Branch on December 30, 2013 (law 120), we clarify that the Panama Territorial Tax Principle -which is one of the key advantages of the Panama Financial and Services Center- will be maintained as usual without changes, this is ratified by the Panama Presidency on the following official communications:
https://www.presidencia.gob.pa/5183-Articulos-2-y-3-de-Ley-120-seran-derogados
https://www.presidencia.gob.pa/5186-gobierno-reitera-compromiso-con-territorialidad-fiscal
The Panamanian Territorial Tax Principle legal base is established on the Panama Fiscal Code, Article 694. In accordance to Article 694 of our Tax Code, only income generated from individuals and corporate entities, national or foreign, domiciled or not in the Republic of Panama derived within the national territory are subject to income tax.”
To summarize, we reiterate that there would be no tax changes for the offshore activities in Panama as usual.
Do not hesitate in contact us at our Panama law firm for any questions or further legal assistance in Panama.