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Government and institution measures in response to COVID-19.

Government and institution measures in response to COVID-19.

Return to homepage  |  Last updated: 14 October, 2020

General Information

Executive Decree No.251 of March 24, 2020 was published in the Official Gazette, which introduced extraordinary tax measures in order to alleviate the economic impact of taxpayers in Panama as a result of the State of Emergency emerged by COVID-19.

Law No. 134 of March 20, 2020, was published in the Official Gazette, to amend Law 99 of 2019, about the general tax amnesty for the payment of taxes managed by the General Directorate of revenues, Law 76, related to the Tax Procedure Code among other provisions. 

Tax measures – Direct and Indirect

(e.g. payment deferrals, rate reductions…)

Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.

Other measures and sources

Recovery Plan Overview

  • Recovery plan : Social and Economic Recovery Plan
  • Announcement : July 1th 2020
  • Main orientations : Micro, Small and Medium Enterprises & Foreign Investment Attraction 

Main Measures

Micro, Small and Medium Enterprises Programs

Panamanian government announce a package of programs principally destined to provide a relief aid to Micro and Small Medium Enterprises (SME), who have suffered the most the consequences of the COVID-19 pandemic.

Key Measures

  1. Creation of the “Bank of Opportunities Plan”. This consist of loans that will go from 2K to 5K to destined to finance micro enterprises.
  2. 50 Million dollar fund for Soft Loans destined to Micro and SMEs. This fund will be destined to set out loans to Micro and SME´s, in which the loan amount would depend on the type of company. Loans could go from 5K to 250K.
  3. 50 Million dollar Warranty Fund  program for Micro and Small enterprises. This fund would serve as a warranty for projects made by micro and small enterprises who wishes to invest in a project.
  4. 150 million dollar fund for soft loans destined to Agricultural activities
  5. 1 Billion injection to a Credit Strengthening Program.
  6. Reactivation of several public construction projects (Highways,Railways,Bridges)

Sectors/Industries/Areas affected

  • Micro, Small and Medium Enterprises, agriculture, aquaculture, public transportation, and infrastructure


Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing Activities

The Special Regime for the Establishment and Operation of Multinational Companies for the Provision of Services Related to Manufacturing Activities (EMMA, for its acronym) was enacted. This regime allows a company foreign duly registered in Panama, or a Panamanian company (owned by a multinational company, affiliate or subsidiary), to establish a regional headquarters in Panama and provide manufacturing services authorized by the law to companies in its own business group.

Key highlights

  • Reduced Income Tax rate of 5% on the net taxable income was established for the services provided by companies holding an EMMA license.
  • Personnel working under the EMMA Permanent Visa will not be subject to Income Tax.
  • Among the services that EMMA licensed companies can perform, which in all cases must be provided only to companies of the same business group, are the following:
    • Manufacture of products, machinery and equipment;
    • Logistics services such as storage, deployment and distribution center for components or parts; Analysis, laboratories, tests or others related to the rendering of services related to manufacturing;
    • Product development, research or innovation of existing products or processes;
    • Assembly of products, machinery and equipment;
    • Maintenance and repair of products, machinery and equipment;
    • Remanufacture loaned products, machinery and equipment;
    • Product conditioning.

Sectors/Industries/Areas affected

  • Manufacturing Companies, Pharmaceutical, Construction companies.

Contact us

Tax: Luis Laguerre – llaguerre@kpmg.com
Legal: Jair Montufar – jmontufar@kpmg.com