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Panama enacts law amending Panama-Pacifico regime

On 12 December 2018, Panama published, in Official Gazette No. 28675-B, Law 66 of 2018, which amends the Panama-Pacifico regime. Law 66 went into effect on 14 December 2018. For more information on the bill, see EY Global Tax Alert, Panama’s Minister of the Presidency proposes bill to amend the Panama Pacifico regime, dated 10 October 2018.


Panama’s Minister of the Presidency proposed to the National Assembly Bill No. 664 of 2018, which contained amendments to the Panama-Pacifico regime. The bill was discussed by the National Assembly and several provisions of the bill were eliminated before its approval and enactment as Law 66 of 2018.

Law 66

The Law defines office administrative services and requires companies to comply with certain requirements to claim benefits from the rendering of office administrative services. The Law does not adopt the provision in the bill that allowed only multinational companies to claim benefits for the provision of office administrative services.

Additionally, the Law does not adopt the provision in the bill that established transfer pricing rules for companies registered under the Panama-Pacifico regime. However, transfer pricing rules still apply to those companies because of amendments introduced to the Fiscal Code through a separate bill that has already been approved by the National Assembly. The amendments establish that companies operating under any preferential tax regime (i.e., the Panama-Pacifico regime) will be subject to transfer pricing rules for their operations with related parties located in Panama, abroad or in any other preferential tax regime.

Also, Law 66 does not include the exemptions for property tax and property transfer tax that were included in the bill.

EYG no. 012713-18Gbl

Download this Tax Alert as a PDF file.

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