LatinNews Daily - 28 May 2026

*Panama’s 71-member unicameral legislature has approved new legislation which requires multinational entities domiciled in the country to demonstrate that they have physical operations in Panama, for example illustrating that there is “qualified personnel, appropriate premises, strategic decision making, and actual operating expenses within national territory”, or else face a 15% tax on passive foreign income. It also grants special treatment for income derived from intangible assets developed in Panama, such as patents, trademarks, and copyrights, to encourage innovation, while the merchant marine sector as well as financial entities supervised by the banking, securities, and insurance superintendencies are excluded from the regime. The regulations will take effect from the 2027 fiscal period and will grant a 90-day period for the executive branch to issue implementing regulations. The new initiative, which awaits promulgation by President José Raúl Mulino, is in line with efforts by his administration to remove Panama from the European Union (EU)’s list of non-cooperative jurisdictions for tax purposes – a major government priority.

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