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As of the 1st
of March, 1985 there has been imposed an Annual Franchise Tax of
US$150.00 on all Panamanian corporations. The said tax is payable in
the following manner:
(a)
Corporations which were registered at the Publics Registry office
after the above date, are required to pay the said tax within three
months of the date of registration of the Articles of Incorporation,
or the anniversary thereof in subsequent years.
(b)
Corporations registered before the above date, are required to pay
the tax within three (3) months subsequent to the anniversary date of
the registration of the Articles of Incorporation at the Public
Registry, and in similar fashion for subsequent years.
Failure to
pay the aforementioned tax will result in a penalty of US$30.00 for
each year, or fraction thereof, for which payment is overdue.
Income Tax in
Panama is levied only upon Net Income derived from operations within
the territory of the Republic of Panama. Income obtained from
corporations consummated abroad is not income obtained from sources
within Panama and, therefore, is not taxable under our laws.
Even if a
Panamanian corporation has an office in Panama, employees in Panama
and a license to engage in business in Panama, it still does not pay
Income Tax in Panama, if the transactions out of which the income
arose were consummated outside of the Republic of Panama. No tax
liabilities arise even though payment of the merchandise is made from
the Republic of Panama, or payment therefor is received in the
Republic of Panama or if the sale or purchase corporations are
directed from an office situated in the Republic of Panama.
If a
Panamanian corporation engages in business within the territory of
the Republic of Panama and also outside the Republic, it is subject
to Income Tax only on that portion of its net income arising out of
business carried on within the territory of Panama.
Only
dividends distributed from income arising from Panamanian sources are
taxable at a flat rate of 10% whether received by corporations or
individuals resident or non-resident. However, dividends distributed
from income arising from sources outside of Panama are not taxable.
Panama law further provides that a Panamanian corporation which has,
as its only income, dividends or participations from other
corporations, Panamanian or foreign, is not subject to Panama income
or dividend tax. |
