The tax credit can be transferred in its total amount or the undrawn portion, not being necessary to sell or transfer the shares, bonds, or financial instruments.
Law No. 314, enacted on June 21, 2022, and effective 30 days from that date, is designed to encourage investment and financing for new tourism establishments or expansion of existing ones, including additional services and products.
The requirement to access the benefits contemplated in the regulation is to be registered in the National Registry of Tourism somewhere other than the district of Panama.
The new regulation provides for:
- 60% of the project’s total value, declared to the Panama Tourism Authority (ATP, in its Spanish acronym), will be recognized as a tax credit. The regulation excludes, in this case, the value of the property and the infrastructure of the Master Plan (it replaces Law No. 122 on tax incentives, which allowed 100% tax credit of the investment).
- The infrastructure of the Master Plan declared to the ATP is recognized as a 5% tax credit of its value.
- The new regulations reduce the tax incentive period from December 31, 2025, under Law No. 122 to December 31, 2024.
- The tax credit may be recognized and applied from the second year of the investment. Additionally, the tax credit is capped at 50% of the income tax incurred, the complementary tax, and the estimated income tax, as long as it does not exceed 15% of the initial value of the tax credit per year until the totality of the tax credit is completed for a period of up to 15 years.
Natural or legal persons that, upon the effective date of the new law, have an environmental impact study and authorization of the Superintendent of the Stock Market of Panama for the issuance of financial instruments such as bonds, shares, etc., to be issued by a tourist company or real estate investment company, or have a tax credit recognition resolution issued by the General Revenue Directorate (DGI, in its Spanish acronym), will be entitled to a 100% tax credit for the total cost of the project declared to the ATP, excluding the value of the farm and the debts or investments that the tourist company or real estate investment company has made before the effective date of the new law. The deadline for this procedure is July 30, 2022.