Panama to Tax Shell Companies Used by Wealthy With 15% Levy

Panama lawmakers are cracking down on shell companies used by wealthy foreigners to stash profits obtained abroad by mandating that corporations without domestic activities pay a 15% tax.

The bill was passed by Panama’s congress last week and signed by President Raul Mulino, who congratulated lawmakers on their vote. The Central American nation has earned a reputation in the past decade as a tax haven, largely due to the Panama Papers scandal, which showed the widespread use of shell companies as a way to avoid taxes on income earned in other countries.

Jose Raul Mulino

Photographer: Luis Robayo/AFP/Getty Images

Panama hopes that the move can ...