Panama Enacts Tax Reform

On 4 May 2015, Panama enacted Law No. 27, which amends certain provisions of the Tax Code and other tax laws. The main amendments are summarized as follows.

Exceptions to the Definition of Panamanian-Source Income

Exceptions are introduced in regard to the territorial tax principle that income derived by non-residents must be Panamanian-source in order to be taxable in Panama. These exceptions are based on the status of the payer.

Under the general definition, income is deemed Panamanian-…