The Council of Ministers approved Bill 30-26 on 19 August 2026, sending it to the National Assembly for debate. The bill amends the Fiscal Code to modernize the taxation of digital economy operations, ensuring parity between domestic and foreign digital service providers regarding ITBMS (VAT) and income tax obligations.
Key Takeaways
- Leveling the Playing Field: The legislation extends ITBMS withholding obligations to intermediaries and payment processors facilitating digital transactions, capturing revenue from platforms that previously operated outside the tax net.
- Permanent Establishment and Nexus Rules: The bill introduces economic nexus criteria for corporate income tax, targeting highly digitalized business models that generate significant Panamanian user value without physical presence, consistent with OECD Pillar One approaches.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Original Announcement