Panama: Tax incentives to promote tourism

Panama: Tax incentives to promote tourism

A new law (No. 122) has been published in the official gazette and provides tax incentives for the promotion of tourism activity.


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The new law grants individuals and legal entities an income tax credit of 100% for amounts invested in the acquisition of bonds, shares or other financial instruments issued by companies registered with the National Tourism Registry (Registro Nacional de Turismo) regarding new tourism projects or extensions of certain existing projects.

The tax credit is available only to the investor that is the first acquirer of the financial instruments, and the tax credit period is open until 31 December 2025 for investors that are not directly or indirectly linked to the tourism company that issues the financial instruments.

The tax credit is available for a maximum period of 10 years. There are certain conditions as to application of the tax credit, such as that the tax credit can only be used after the second year following the year of the investment, and there are provisions addressing the assignment of the tax credit to third parties.

Bonds, stocks, and other financial instruments that may be subject to investment for the purposes of the tax credit must meet certain requirements.

Read a January 2020 report (Spanish) prepared by the KPMG member firm in Panama

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