Update On Panama Entities

Author:Mr Ricardo Cambra La Duke
Profession:Cambra La Duke & Co
 
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The Republic of Panama has a Tax System that is based on the Territorial Principle of Taxation. This principle that Panama has embraced means that only Panama-source income is taxed.

An entity or an individual, which carries its activities outside or from Panama, will escape the obligation to file tax returns and further pay Income Tax on its foreign source income. However, a Panama company or private foundation do need to pay the Government of Panama an Annual Fee of $300.00 for it to be kept in good standing notwithstanding from where the income comes from.

By means of Law 52 of 2016, Article 318-A of the Tax Code of the Republic of Panama is amended, specifically by adding suspensions of corporate rights for the following reasons:

Suspension of corporate rights to the legal persons that remain without appointing a resident agent for a period longer than ninety (90) calendar days after the resignation, removal or termination of existence of its former resident agent. Suspension of corporate rights to those legal persons incurring in late payment of its Annual Government Fees for a period of three (3) consecutive years. Suspension of corporate rights to those legal persons incurring late payment of any fine or penalty...

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