Panama Gazettes Law Amending Tax Code

The Panamanian Official Gazette May 28 published Law No. 526, amending the tax code. The law includes measures: 1) establishing economic substance rules for multinational group entities incorporated or domiciled in Panama that derive passive income from abroad, including dividends, interest, royalties, capital gains, and real estate income; 2) imposing a 15 percent tax rate on net taxable passive income sourced outside Panama that are derived by nonqualified entities; 3) requiring the annual reporting of passive income sourced outside Panama and supporting economic substance information; 4) allowing credits for taxes paid abroad to be used against Panamanian tax liabilities, subject ...