Panama passes law imposing stricter requirements on multinational firms
Panama's National Assembly has approved a law imposing stricter requirements on multinational firms operating in the country. The law mandates that these entities demonstrate real local operations or face a 15% tax on passive foreign income. This legislation aims to enhance tax transparency and support Panama's removal from EU monitoring lists.
- ▪The law requires multinationals to show physical operations in Panama to avoid a 15% tax on passive foreign income.
- ▪Entities must prove economic substance, including qualified personnel and real operating expenses, to comply with the law.
- ▪The legislation takes effect from fiscal year 2027 and includes provisions for income from intangible assets developed in Panama.
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Panama passes law imposing stricter requirements on multinational firmsSign up now: Get ST's newsletters delivered to your inboxA general view of the skyline of Panama City, Panama April 7, 2016. REUTERS/Carlos JassoPublished May 28, 2026, 09:54 AMUpdated May 28, 2026, 09:54 AMPANAMA CITY, May 27 - Panama's National Assembly approved a law that requires multinational entities domiciled in the country to demonstrate real local operations or face a 15% tax on passive foreign income, the Ministry of Economy and Finance said on Wednesday.• The law is intended to help satisfy European Union tax transparency requirements and support the country’s removal from EU monitoring lists.• "At the fiscal level, it requires multinationals to demonstrate that they have physical operations and real…
Excerpt limited to ~120 words for fair-use compliance. The full article is at Straits Times — World.