By means of Official Gazette No. 28,932-A, Law 122 of 2019 (“Law 122”) was enacted, modifying Law 80 of 2012 (“Law 80”), which sets out incentive provisions for the promotion of touristic activities in Panama.
Law 122 modifies article 9 of Law 80, broadening the benefits granted to those who invest in bonds, shares and other financial instruments issued by touristic enterprises, treating the amounts invested in such instruments as a fiscal credit for Income Tax purposes. The financial instruments may be related to the development of new touristic projects or to the expansion of already existent projects, as long as they are located outside the District of Panama.
This incentive will be granted until December 31, 2025 to those investors who are not related to the company whose financial instruments they acquire. The credit may be applied from the second year of the investment onwards and the taxpayer shall have 10 years to exhaust it. The investor has to be the first acquirer of the titles.
Law 122 establishes the parameters for the use of this credit, restricting the amount the taxpayer may apply annually to 15% of the total credit, an amount that cannot exceed 50% of the Income Tax to be paid in each period either.
The company issuing the financial instruments shall be registered at the National Tourism Registry (“NTR”) and the financial instruments shall be registered at the Securities Market Superintendence and listed in a Stock Exchange in Panama.
Ricardo Rocha | Associate