On 26 October 2016, Panama enacted Law No. 48, which expands the applicability of retaliatory measures that Panama may impose against foreign States that discriminate against it economically or commercially. The measures now apply to States and international organizations whose regulations impose harmful limitations or conditions against any Panamanian individuals or businesses and affect Panama’s economic and commercial interests on an international scale.
Before the retaliatory measures are enforced, the Foreign Affairs Ministry will notify the State that applies discriminatory measures of its inclusion in the “list of States that discriminate against Panama.” The Ministry will then invite the competent authorities of that State to negotiate an end to the State’s discrimination against Panama.
The retaliatory measures are temporary and include new administrative, commercial, financial, customs, tax, migratory, labor, public procurement, health and national security measures.
Some of the most common measures are:
- An increased tax rate of 20% to 40% on dividends and remittances abroad of income derived from business activities in Panama and application of the general statutory rate over all taxable income
- Customs duty increases
- Immigration and labor measures
- A prohibition on participation in public procurement processes
- A restriction on merchandise and passenger transit
- Any other restriction determined by the Cabinet Council
EYG no. 03711-161Gbl