Kenneth Rijock

Kenneth Rijock

Monday, April 21, 2014

LEADER IN PANAMA PRESIDENTIAL CAMPAIGN STATES THAT HE WILL REIMPOSE 30% FOREIGN PROFITS TAX ON CORPORATIONS


The candidates debate; Arias is at center
José Domingo Arias, the choice of the ruling political party as the next president of the Republic of Panama, and the favorite, has promised his supporters that, should be be elected, he will reinstate the country's tax law, requiring all corporations to pay income tax of 30%  of their foreign-derived profits. This pronouncement, which he has made several times while on the campaign trail, could in theory result in a balanced budget for Panama, but the potential economic fallout could be catastrophic for Panama.

If all the expats who take advantage of Panama's tax exemption for profits earned outside the Republic were to pack their bags (including their bank accounts) and leave, Panama would not only be plunged into depression, with unemployment quickly rising, but dirty money would find another tax haven to do business. Do you have clients who are invested in Panama ? What are they to do, I wonder ?

Is this really going to happen ? Just the threat of across-the-board taxation is enough to fill the outbound Copa flights. We will be monitoring the situation as we get closer to the election; pay attention.




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