submit in its statement of income
tax applicable to said increase of
the arm's length amount of assets
used and the risks involved. The
respective costs and deductions
shall then be arm's length applicable
to the income involved, and the
net result shall be subject to a five
percent tax rate.
operations with related parties having
a License of Office Multinational
Headquarters shall be subject to the
transfer price regime according to the
provisions of Article 762-D of the
Fiscal Code.
applied to any operation conducted by
an Office of Multinational Headquarters
with related parties established in the
Republic of Panama or with related
parties that have a fiscal domicile in
other jurisdictions or established in the
Colón Free Zone, the Panama-Pacific
Special Economic Area, Offices of
Multinational Headquarters, Ciudad del
Saber or any other free zone or special
economic area.
Offices of Multinational Headquarters
are exempt of income tax on dividends,
complementary tax and tax on branches,
regardless of their being local or foreign
source or exempt.
Headquarters is not bound to have a
fiscal team in its personnel, it must
document its activities in invoices or
equivalent documents, which may
enable the Income Tax Authority
(Dirección General de Ingresos) to
control, register, subject to accounting
and oversee the transactions it has
carried out.
to pay the tax stipulated in Article 1004
of the Fiscal Code because they are not
required to have a Notice of Operation.
and securities issued by an Office of
to the provisions of the Fiscal Code
and Decree 170 of 1993. If income tax
is applicable to the profits obtained, it
shall be at a fixed rate of two percent,
and the buyer must retain one percent
of the total value of the sale by way of an
advance settlement of the income tax on
capital gains.
amended, shall stipulate the following
in respect of the income of the Office of
Multinational Headquarters:
documented or not documented
service or action provided by an
Office of Multinational Headquarters
must retain a rate of five percent
of the amount to be remitted
to the legal entity holding the
License of Office of Multinational
Headquarters, provided always
that said services be related to
producing income of a Panamanian
source or preserving it, and that its
value has been considered by the
person receiving it as a deductible
expense. Similarly, individuals
or legal entities living outside of
the Republic of Panama shall be
subject to pay such income tax to the
extent that the services provided are
related to producing the income of a
Panamanian source.
Panama shall be subject to income
tax on the interests, commissions
and other charges due to loans or
financing used in the Republic of
Panama.
involved must retain a rate of five
percent of the 50 percent of the
amount to be remitted to said person
living outside of the Republic of
Panama, unless the individual or
legal entity domiciled outside of the
Republic of Panama has registered
as taxpayer with the Tax Authority
(Dirección General de Ingresos).
Multinational Headquarters are
exempt from income tax, social
security contributions and education
insurance on the salary and other
labor remunerations, including salary
in kind, when said salaries and labor
remunerations are paid, assumed and
recognized as personnel expenses in
the accounting of the entity holding
a License of Office of Multinational
Headquarters.
obtaining a visa as permanent
personnel of the Office of Multinational
Headquarters in the Republic of
Panama, the foreigner who may
so desire may choose to obtain a
permanent resident visa, but after
obtaining that visa, said foreigner shall
be subject to income tax, social security
contributions and education tax on the
amounts of money received as salary
and other remunerations, including
salary in kind.
Headquarters may be cancelled if it is
proven that it engages in activities that
are not authorized by its license, and
thereupon, said Office of Multinational
Headquarters shall also be liable to
payment of outstanding taxes with
the respective sanctions, surcharges,
interests and penalties stipulated by the
Fiscal Code.
Office of Multinational Headquarters
that have a fiscal agreement with the
Ministry of Economy and Finance
must cancel said agreement and must
implement the changes stipulated by
Article 12 of Law 41 of 2007 by June
30, 2021.
of Multinational Headquarters entitled
to legal stability for investments under
Law 54 of 1998 shall be automatically
exempt from income tax on income
derived from services provided,
including services provided to a
taxpayer in the Republic of Panama,
until the expiration date of its legal
stability.