PANAMA

On October 19,  the plenary of the National Assembly passed in third and final debate the bill that seeks to create a Special Economic Area in the district of Aguadulce, province of Coclé, with the purpose of establishing a logistic and commercial distribution center that would enjoy tax and customs benefits. The text was passed with modifications during its second debate on October 18. However, the amended initiative is not available yet. The bill goes now to the Executive Branch to be published in the Official Gazette in order to become effective.

Among the main provisions of the bill, it is worth mentioning:

• It creates a Special Fiscal, Legal, Labor, Port and Customs Regime for the establishment and operation of the Aguadulce Special Economic Area, which includes the Free Zone and Multimodal Logistics Support Zone.

• It provides that companies wishing to establish themselves and undertake operations there, must register or enroll in the Registry of the Agency in charge of administering the operation of the Economic Zone. Among the documents to be submitted, they must provide a description of the activities to be developed and the initial and future investment of their activity.

• It indicates that the companies established in the Special Economic Area may start their operations within one year from the date of their inscription in the Register, establishing a commercial domicile therein, among other requirements. Thus, they may introduce any type or class of merchandise, products, equipment and other goods, in general, as well as transfer and sell them, without limitation of quantities.

• Among the main activities that the companies located in the Zone will be able to perform are the possibility of importing and exporting all kinds of merchandise, products, equipment and other goods in general, free of taxes, to or from the Economic Area of Aguadulce. 

• It establishes that this area is a tax-free zone for registered companies, including exemptions to: import duties on all kinds of merchandise and services introduced into the zone; Tax on the Transfer of Movable Goods and the Rendering of Services (ITBMS in Spanish); export or re-export taxes, among others. 

• However, it indicates that they will be subject to the payment of taxes such as: Income Tax, Tax on Dividends and Tax on Remittances or Transfers abroad, among others. Those companies dedicated to the multimodal and logistic services will be exempted from the payment of the mentioned taxes.

Context of the bill

The bill was presented on October 20, 2020 by Deputy Ricardo Torres (PRD – ruling party) and has the support of deputies of the opposition and independents. On October 27 of that year, the Committee of Commerce and Economic Affairs agreed to discuss the bill.

However, the bill was not discussed in the Committee until February 5, 2021, where it was approved in first debate. Until then it was pending to be discussed by the plenary of the National Assembly, which occurred on October 18 and was finally passed on October 19.