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E. Taxation Income obtained from business outside the territory of Panama is not subject to income tax under the Fiscal Code of Panama. Since the enactment of Law No. 1 of January of 1977, there is an annual franchise tax (license fees) on corporations. According to Law No. 6 of 2005, the amount of the franchise must be paid when filing for registration the first time, as of January 2006, after this payment, the amount to be paid will be US$ 300.00. There will be a surcharge of US$50.00, for late payment and a Penalty of US$300.00, when two years has elapsed since the anniversary of the corporation without payment. The authorities require payment of this tax not withstanding the fact that the corporation is active or not. Good standing of a corporation will depend upon this annual payment. The lack of payment of ten (10) consecutive periods will have the definitive retirement of the company from the Public Registry. As a consequence, the company will be considered as dissolved, with all the legal effects that it entails. Panama has not entered into any tax treaty with other countries. |
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