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Panama Backtracks On Controversial New Tax Law


07/01/2014

A new and highly controversial tax law which was introduced in Panama on December 30, 2013 has now been revoked.The government announced on January 02 that it had passed a Cabinet resolution which revokes articles 2 and 3 of Law 120.

The law made it a requirement for all individuals and companies to pay tax on income generated in Panama or abroad.The new law had been met with fierce opposition in both the political and public spheres. Although it has been renounced, there are concerns that irreparable harm may have been done to Panama's reputation as a tax-friendly jurisdiction during the period after the government revealed its intentions.

The Central American country has developed into a key trading and business hub in the region largely thanks to the tax incentives it offers. General taxation had been imposed until now on a territorial basis, meaning that taxes only apply to income or earnings derived from business undertaken within the country's borders.


www.lowtax.net

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