Panama has been chosen by numerous companies dedicated to all kinds of commercial activities as a profit centre and a real base to coordinate their multinational or regional operations. Among the important considerations to justify the setting up of a Panama Coordination Centre are:
Panama tax laws establish different considerations depending if the source of the income is generated within or outside Panamanian territory. Income produced from any source within the territory of the Republic of Panama is subject to income tax. The income tax of Panama is levied only upon net income derived from operations within the territory of the Republic of Panama. Foreign source income, in other words income generated outside the Panamanian jurisdiction, is 100% exempted.Republic of Panama, and therefore is tax exempt:Panama, the sale of merchandise or products for an amount greater than that for which said merchandise or products had previously been invoiced against the office established in Panama, provided the goods transit solely outside Panama.
b) Directing from an office established in Panama, transaction, which are executed, completed or effected outside Panama.
c) Distributing dividends or participations, when such are derived from income not produced within the jurisdictional territory of the Republic of Panama, including the producing income in parts a) and b) aforementioned.Panama does not pay any income tax if the office merely directs operations from Panama. In other words, if it only performs international operations from Panama.
Dr. Juan Francisco Pardini
Pardini & Asociados offers you the Guide to Doing Business in Panama 2023 completely FREE! Download here!Get it now