Panama: Exemption from selective consumption tax for electric vehicles

A new law provides an exemption from payment of selective consumption tax for electric vehicles until 31 December 2030

New law provides exemption from selective consumption tax for electric vehicles

Law No. 295 (25 April 2022)—which becomes effective 1 January 2023—provides an exemption from the payment of the selective consumption tax (currently set at 5%) for electric vehicles until 31 December 2030.

The law also provides for the following non-tax related incentives for electric vehicles:

  • Exemption from the payment of the vehicular license plate procedure for a period of five years
  • Preferential parking at public institutions, shopping malls and real estate projects
  • Requirement that residential and commercial real estate projects include at least one electric vehicle charging station in their construction plans
  • Clearance for citizens and distribution companies to establish charging stations and provide electric vehicle charging services
  • Requirement for public institutions of the national government to progressively replace their fleet of fuel-burning vehicles with electric vehicles (10% by 2025, 25% by 2027, and 40% by 2030)

Read a June 2022 report (Spanish) prepared by the KPMG member firm in Panama

 

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