Law 27 of 2015: Intellectual Property Transactions

New rules approved by means of Law 27 of 2015 further regulated by Executive Decree 263 of 2015 impact directly the tax advantages of intellectual property transactions to persons located within Panama.

These rules consider taxable income in the Republic of Panama, all income received by natural o legal persons whose domicile in located outside Panama, but that benefits natural or legal, foreign or national persons, located within Panama, including without limitation, fees or income from copyrights, royalties, trademarks, patents, know how, technological and scientific knowledge, industrial or trade secrets, inasmuch as those services directly impact the generation of Panama source income or its conservation, and which payment have been deemed as deductible expenses.

Such rules shall not be applicable to natural or legal persons which income is exempted by reason of treaties, law-contracts or special laws such as multinationals registered under the multinational headquarters regime, entities registered in the special areas like Panama Pacifico, entities located in trade or petroleum free zones, international organizations, entities registered in the City of Knowledge, as well as entities with international license from the Superintendency of Banks, or the Superintendency of Capital Markets, provided that all income is generated from foreign source.

Dr. Juan F. Pardini

pardini@padela.com